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

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It is June and a trader writes a October call option with a strike price of $20. The stock price is $18, and the option price is $2. Describe the investor's cash flows if the option is held until October and the stock price is $25 at this time.
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You purchased three contracts of "XYZ December 4 2015 84.00 Call" at $5.50 per options and exercised it when the underlying stock price was $92. What was your profit and return on the investment, excluding the commisions.
An investor subscribes to a call option with a strike price of 20USD. In May, the shares cost 18USD, and the option price is 2USD. Describe the investor's cash flow, if the option is retained until September and the stock price is 25USD on that date.
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.
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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.