Question 1: In the table below you are given the details of the put and call options on the shares of Fica Limit Expiration Date Exercise Price Call Price (Premium) | Put Price (Premium) (Rand) (Rand) (Rand) September 2015 430 41.20 11.05 460 22.50 22.20 490 10.10 39.36 January 2016 430 65.98 27.20 Required 1. Determine the pay-off and profit/loss to an investor who; a) Purchases the September-expiration Fica Ltd.'s call options with an exercise price of R- if the share price at expiration is R400? What if the share price at expiration is R550? b) Sells the September-expiration Fica Ltd.'s call options with an exercise price of R49 the share price at expiration is R400? What if the stock price at expiration is R550?
Question 1: In the table below you are given the details of the put and call options on the shares of Fica Limit Expiration Date Exercise Price Call Price (Premium) | Put Price (Premium) (Rand) (Rand) (Rand) September 2015 430 41.20 11.05 460 22.50 22.20 490 10.10 39.36 January 2016 430 65.98 27.20 Required 1. Determine the pay-off and profit/loss to an investor who; a) Purchases the September-expiration Fica Ltd.'s call options with an exercise price of R- if the share price at expiration is R400? What if the share price at expiration is R550? b) Sells the September-expiration Fica Ltd.'s call options with an exercise price of R49 the share price at expiration is R400? What if the stock price at expiration is R550?
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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![Question 1:
In the table below you are given the details of the put and call options on the shares of Fica Limited
Expiration Date
Exercise Price
Call Price (Premium) Put Price (Premium)
(Rand)
(Rand)
(Rand)
September 2015
430
41.20
11.05
460
22.50
22.20
490
10.10
39.36
January 2016
430
65.98
27.20
Required
1. Determine the pay-off and profit/loss to an investor who;
a) Purchases the September-expiration Fica Ltd.'s call options with an exercise price of R490
if the share pri
b) Sells the September-expiration Fica Ltd.'s call options with an exercise price of R490 if
the share price at expiration is R400? What if the stock price at expiration is R550?
at expiration is R400? What if the share pric
expiration is R550?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F64d550a8-b604-459b-b48c-0fc1efc3ce7c%2F3f53286f-92f2-432c-9f88-538256f68a5c%2Fvv435b_processed.png&w=3840&q=75)
Transcribed Image Text:Question 1:
In the table below you are given the details of the put and call options on the shares of Fica Limited
Expiration Date
Exercise Price
Call Price (Premium) Put Price (Premium)
(Rand)
(Rand)
(Rand)
September 2015
430
41.20
11.05
460
22.50
22.20
490
10.10
39.36
January 2016
430
65.98
27.20
Required
1. Determine the pay-off and profit/loss to an investor who;
a) Purchases the September-expiration Fica Ltd.'s call options with an exercise price of R490
if the share pri
b) Sells the September-expiration Fica Ltd.'s call options with an exercise price of R490 if
the share price at expiration is R400? What if the stock price at expiration is R550?
at expiration is R400? What if the share pric
expiration is R550?
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