OPTION A B C Ꭰ E Type of option Call Call Put Put Call Cost of option $200 $350 $500 $300 $450 Stock price at expiration $55 $45 $50 $40 $26 Strike price per share $50 $42 $60 $35 $28 Number of shares 100 100 100 100 100 Payoff per share Payoff per option Profit per option Would the option be exercised? (Enter 1 for Yes, 2 for No)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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For each of the 100-share options shown in the following table, use the underlying stock price at expiration and other information to determine the Payoff per share, Payoff per option and Profit per option, ignoring brokerage fees. In addition, please indicate if the option will be excercised based on your results.

OPTION
A
B
C
Ꭰ
E
Type of option
Call
Call
Put
Put
Call
Cost of option
$200
$350
$500
$300
$450
Stock price at expiration
$55
$45
$50
$40
$26
Strike price per share
$50
$42
$60
$35
$28
Number of shares
100
100
100
100
100
Payoff per share
Payoff per option
Profit per option
Would the option be exercised?
(Enter 1 for Yes, 2 for No)
Transcribed Image Text:OPTION A B C Ꭰ E Type of option Call Call Put Put Call Cost of option $200 $350 $500 $300 $450 Stock price at expiration $55 $45 $50 $40 $26 Strike price per share $50 $42 $60 $35 $28 Number of shares 100 100 100 100 100 Payoff per share Payoff per option Profit per option Would the option be exercised? (Enter 1 for Yes, 2 for No)
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