QUESTION 3 What is the value of five August $25 call contracts on Dove stock? Dove (DUV) Underlying stock price: 31.12 Expiration Strike Call Put Aug 25 6.90 10 Nov 25 7.10 15 Aug 35 20 4.10 Nov 35 85 4.75 OA S68 OB S690 OC $3.450 OD. $340 OE $34

QUESTION 3 What is the value of five August $25 call contracts on Dove stock? Dove (DUV) Underlying stock price: 31.12 Expiration Strike Call Put Aug 25 6.90 10 Nov 25 7.10 15 Aug 35 20 4.10 Nov 35 85 4.75 OA S68 OB S690 OC $3.450 OD. $340 OE $34

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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Current stock price for XYZ $50.00 Interestrate 3% Dividend rate 0% Option PUT PUT PUT PUT CALL CALL CALL CALL - Strike Expiration Option Price $30.00 6-months $40.00 6-months $50.00 6-months $50.75 6-months - $50.00 6-months $50.75 6-months $55.00 6-months $60.00 6-months $0.14 $0.77 $2.74 $2.97 $3.48 $2.97 $1.20 $0.15 Implied Vol 40% 32% 22% 21% 22% 21% 19% 15% Delta (AOption/AS) -0.023 -0.123 -0.431 -0.470 XYZ stock is currently trading at $50 per share. We ask our favourite trading desk to price a bunch of 6-month options on XYZ: 4 puts and 4 calls. The table above gives the information 0.569 0.530 0.299 0.065 For each option price we've run the price through the Black-Scholes formula and solved for implied volatility. The tables also gives the deltas: the derivative of each option price with respect to the stock price. As you know this means: Leave the implied volatility, the interest rate, and the dividend unchanged Change the current price of the stock by a small amount up and…
Long 1 lot Syarikat XYZ stock @ RM 15Long 1, 3-month Syarikat XYZ put @ RM 0.15 Stock Price of maturity Value of long stock position Profit/loss to Long Put position @ 0.15 Value of combined position at maturity 10 -5000 4850 -150 11 -4000 3850 -150 12 -3000 2850 -150 13 -2000 1850 -150 14 -1000 850 -150 15 0 -150 -150 16 1000 -150 850 17 2000 -150 1850 18 3000 -150 2850 19 4000 -150 3850 20 5000 -150 4850 1. Based on table above Draw the combined position graph and calcuate the: a. Max loss b. Max Profit c. Break even point
Calls Puts Close Hendreeks Strike Price Expiration Vol. Last Vol. Last 103 100 Feb 72 5.20 50 2.40 103 100 Mar 41 8.40 29 4.90 103 100 Apr 16 103 100 Jul 8 10.68 14.30 10 6.60 2 10.10 Suppose you buy 40 July 100 put option contracts. What is your maximum gain? On the expiration date, Hendreeks is selling for $86.40 per share. How much is your options investment worth? What is your net gain? (Do not round intermediate calculations.) Maximum gain Terminal value Net gain
Module 4 Question 8
Question 1 Options Six months ago you bought for £18 a call option on a stock with an exercise price of £120. If the stock price at expiration of this option is £150, what is your return on investment? A. 167% B. 10% C. 67% D. 8%
Straddle problem Given a stock with a current strike price of $25 and the following information; Write 1 ABC September 25 Calls @ 1Write 1 ABC September 25 puts @ 3 What is the total premium paid? (assume 1 contract = 100 shares) What is the maximum investor return? What is the maximum investor loss? Why do investors use straddles? If an investor buys a derivative position, are they long or short?
Question 16 A stock expects to pay a dividend of $3.97 per share one year from today. After paying the dividend, the stock can be sold for $82.85 per share. If the appropriate discount rate for the stock is 16.81 percent, how much is one share of the stock worth today? a $74.33 $492.86 $70.93 None of these options are correct $23.62
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