n acquired an option to buy 5,000 shares of XYZ Corp. at a strike price of P300 on a later date. ABC paid a premium of P4,000. On the last day of the option, an XYZ Corp. stock is selling at P280 each. If ABC will be acquiring the XYZ s
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ABC Corporation acquired an option to buy 5,000 shares of XYZ Corp. at a strike price of P300 on a later date. ABC paid a premium of P4,000. On the last day of the option, an XYZ Corp. stock is selling at P280 each. If ABC will be acquiring the XYZ stocks, how much should it pay?
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- You purchase one Virgin Galactic March 120 put contract (equalling 1000 shares) for a put premium of $10. You hold the option until the expiration date, when Virgin Galactic stock sells for $123 per share. a) How much is the realized profit/loss on the transaction? b) What is the maximum profit that you can realize on this position? c) What is biggest loss that you can suffer on this position? d) What is the realized profit/loss of your counterparty (the buyer of this call option)? Please briefly explain the calculations as well, thanks!24. On 1 July 2023 Cooloola Ltd provided 1 million options to its chief executive officer. The options were valued at $1.00 each and allowed the chief executive officer to acquire shares in Cooloola Ltd for $7 each. The chief executive officer is not permitted to exercise the options before 30 June 2025 but may then exercise them at any time between 1 July 2025 and 30 June 2026. The market price of the Cooloola Ltd shares on 1 July 2023 was $6.50. On 31 December 2025 the share price reaches $7.70, and the chief executive officer decides to exercise her options and acquire the shares in Cooloola Ltd. Required: Account for the issue and exercise of the options in Cooloola Ltd.Bill Bloggs has 10,000 shares in Carlton Ltd. The current price in Carlton Ltd is $9.50. Bill Bloggs would like to sell the shares immediately, but certain restrictions have been imposed upon him that mean he will have to wait one month. Concerned about fluctuating prices, he decides to enter into a futures contract on Carlton Ltd shares in which he takes a sell position. The price of Carlton Ltd future is $9.70, and his futures contract is for 10,000 units. One month later the price of Carlton Ltd shares has risen to $12.10 and a Carlton Ltd future cost $12.29. Bill Bloggs closes out his futures contract and sells his shares. How much does Bill Bloggs receive from the above transaction? Please write your answer in the grey text box provided below. 5