You are given the daily closing prices of a stock from Jan 1, 2018 to Jan 5, 2018:Date Stock priceJan 1Jan 2Jan 3Jan 4Jan 5A 5.00B 5.50C 6.00At the end of Jan 1, 2018, Jie purchased the following options that expire on Jan 5, 2018:(a) Arithmetic average strike Asian call option.(b) Up-and-in call option with a barrier of 110 and strike of 105.For both options, the underlying asset is the stock and the payoff is determined using the last 4 daily closing prices.Determine Jie's total payoff on Jan 5, 2018.DPossible AnswersE1056.501097.00112110111

A call option gives the right but not the obligation to buy at the strike price. We can determine…

Answered: For both options, the underlying asset…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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solve a,b,c and d please. Round to the nearest dollar
The price of a stock on February 1 is $124. A trader sells 200 put options on the stock with a strike price of $120 when the option price is $5. The options are exercised when the stock price is $118.
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Assume you purchased the right to sell 2,000 shares of Target stock in February 2022 at a strike price of $240 per share. Suppose Target stock sells for $212 per share immediately before your options’ expiration. What is the rate of return on your investment? What is your rate of return if the stock sells for $268 per share (think about it)? Assume your holding period for this investment is exactly three months. Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-month returns as a percent rounded to 2 decimal places.
The stock of Bedrock Solutions is currently trading at $24.50 per share. The 1-month put option with strike price of 13.50 is currently selling for $2.16. What's the intrinsic value of this put option?
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In the beginning of January 2023 you want to estimate the value of a stock. On December 31 2022 the price of the stock was $63.5 and you believe that the annual dividend growth rate and stock price growth rate will be 7% for the years 2023, 2024 and 2025. The dividend of 2022 will be paid in 2023 and will be S 1.48. The discount rate is 11.5%. Calculate the price of the stock and say if it is over or undervalued
Given the following information, price of a stock: strike price of a six-month call: market price of the call: strike price of a six-month put: market price of the put: $102 $100 $6 $100 $3 The maximum amount a short seller (of the stock) can profit is $
A put with a strike price of $50 was sold at $11 when the price of the stock was $48. What was the time value of the put at expiration?
1. For each of the following cases, calculate (i) the cashflow paid or received today on entering the position, (ii) the gross payoff at expiry, and (iii) the net payoff from your option trading All options are European style and cover 100 shares in the underlying asset. a) You enter a long call option with a strike price of $6 and premium of $2.30. At expiry, the share price is $7.80. b) You enter a long call option with a strike price of $9 and premium of $0.80. At expiry, the share price is $7.90. c) You enter a short call option with an exercise price of $5 and premium of $0.70. The share price at expiry is $5.40. d) You enter a short call option with an exercise price of $5 and premium of $0.70. The share price at expiry is $4.90. e) You buy a long - put option with a strike price of $10 for a premium of $ 1.20. At expiry, the share price is $8.50. f) You write (i. e., short) a put option with strike price $7 for a premium of $0.60. At expiry, the share price is $5.
The following table lists prices of Amazon options in January 2018 when Amazon stock was selling for $1,200. Exercise Price Expiration Date April 2018 Call Price Put Price $ 31.10 $1,200 1,300 1,400 $1,200 1,300 1,400 $1,200 1,300 1,400 $132.70 73.20 70.10 134.20 $ 53.55 96.00 33.00 July 2018 $161.70 104.00 62.55 156.05 January 2019 $210.00 $ 88.05 155.35 133.25 112.00 190.00 Suppose that by January 2019, the price of Amazon could either rise from its January 2018 level to $1,200 × 1.25 = $1,500.00 or fall to $1,200/1.25 = $960.00. a. What would be your percentage return on a January expiration call option with an exercise price of $1,200 if the stock price rose? (Round your answer to 2 decimal places.) b. What would be your percentage return if the stock price fell? (Negative value should be indicated by a minus sign.) c. Which is riskier: the stock or the option? a. Percentage return b. Percentage return Which is riskier: the stock or the option? % (100) % Option C.
Options were granted on January 1, 2023by Paltel Co. to purchase 15,000 common shares at an exercise price of $22. The average market price of Paltel's common stock during 2023 was $30 per share. Calculate the incremental shares (denominator) for these options on December 31, 2023. (When writing your answer, do not use commas (,) or the dollar sign ($). For example, if your answer is $10,000 write it as 10000). Answer:

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For both options, the underlying asset is the stock and the payoff is determined using the last 4 daily closing prices. Determine Jie's total payoff on Jan 5, 2018.