Question 5 of 30 An investor wrote a naked call option. The premium was Rs. 2.50 per share and the market price and the exercise price of the same are Rs. 37 and Rs. 41 respectively is the amount that is required to be deposited with the clearing house (the contract is for 100 shraes) O Rs. 590 Rs 620 ORs. 680 TS 600

Question 5 of 30 An investor wrote a naked call option. The premium was Rs. 2.50 per share and the market price and the exercise price of the same are Rs. 37 and Rs. 41 respectively is the amount that is required to be deposited with the clearing house (the contract is for 100 shraes) O Rs. 590 Rs 620 ORs. 680 TS 600

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

See similar textbooks

Similar questions

2) You enter into a ‘Call’ Option contract with a strike price of $20. This contract will expire in 31st of March 2021. On 31st of March, you realise that the underlying share price is $28 . a. Will you exercise this contract? Why or why not? b. Is this contract ‘In-the-Money’ or ‘Out-Of-the-Money’?
a) An investor is given the following information: Payoff State 1 State 2 Security Market prices (s=1) (s=2) X £15 £20 PJ = £19 Y £25 £10 PK = £25 Explaining the method(s) and the underlining concept(s), how could the investor use Arrow- Debreu pure securities to replicate the payoff of security X and security Y? What are the prices of pure security 1 and pure security 2?
Question 2 Let 5-532,0-30%,r-65%, and 6-1% (continuously compounded). Compute the Black-Scholes price for a $35-strike European put option with 9 months until expiration Selected Answe Answers $4.02 $4.02 $2.63 $5.6) Od 34:21 11.00
Contract Name Last Trade Date Last Price Bid Ask Change % Change Volume Open Interest Implied Volatility AAPL200417C00105000 (Links to an external site.) 2019-11-19 3:53PM EST 105.00 (Links to an external site.) 160.65 160.75 165.40 0.00 - 20 100 78.61% 7. Is this contract a call or a put option? 8. How much do you need to pay to buy this option contract? Hint: when you buy the contract, you need to use Ask price.
Three months ago, you sold a put option contract on Swiss franc with a strike price of $.60/SF and an option price of $.0060 per SF. Contract size is 10,000 SF. The option expires today when the value of Swiss franc is $.625. What is your total profit or loss on your investment? A. -$310 B. -$60 C. $0 D. $60
¥ Question Completion Status: QUESTION 3 Mr. Adel Owns 200 sahres in XYZ LTD. ahe fears that the price might decline next montha and he wants to make a hedge against this risk. What option shall he byu? O 1. Future Option O 2. Call option 3. Forward Option 4. Put option QUESTION 4 The risk that the due to global warming there might be hurricane in Bahrain. This is risk is part of - O 1. Enterprise risk management 2. Financial risk management 3. Speculative risk amangement 4. General risk amangement Click Save and Submit to save and submit. Click Save All Answers to save all answers.
Question 5: Suppose that a March call option to buy a share for $50 costs $2.50 and is held until March. Under what circumstances will the holder of the option make a profit? Under what circumstances will the option be exercised? Draw a diagram showing how the profit on a long position in the option depends on the stock price at the maturity of the option.Plz explain it
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?
Q.7 A stock XYZ Ltd. is trading at Rs. 650. Mr. Lalit is bullish on the stock but does not want to invest Rs. 650. He does a Long Combo. He sells a Put option with a strike price of Rs. 600 at a premium of Rs. 50.00 and buys a Call Option with a strike price of Rs. 700 at a premium of Rs. 45. Prepare a pay-off table by taking different closing of XYZ Itd. stock and present his profit or loss graphically. Also, discuss the Break even points of the strategy.
D & R A1 5 - 1 Question 5. Pricing Option on Futures Today is September 1. A futures contract on crude oil expiring on December 20 of the same year has a futures price of $44.70. The volatility on the futures contract is 23%, and the continuously compounded risk-free rate is 2%. Assume that there are 365 days in a year. What is the Black model price of a European call option on this futures contract, expiring on December 20 and with an exercise price of $46?
QUESTION 30 Johnson & Johnson (ticker:JNJ) is traded at $172.21 per share when Nancy sold a call option today. The call premium is $3.05 and the exercise price is $180 The option will be expired on Jan. 20, 2024. a. What is Nancy's expectation about JNJ's price between now and expiration date? Also, state reasons why sellling a call is beneficial given her expectation of the price movement. b. What are Nancy's maximum profit and maximum loss? c. Show the profit/loss if, at the expiration date, the JNJ price is (1) $150, (2) $182, (3) $190. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph ABC ✔ ✓ Π "Ω Θ Arial 田く HH = 10pt 田田田 Ev A V 田旺图 † {} Ix ४ Gô Ky Q5 + ≡≡≡≡ € € X² X₂ & >IT
Maturity (days) Strike 66 Part1: SO 620 595.9355586 ● r (annualized) O 0.056329721 11% Option Type Call Use the data you are provided with on blackboard to replicate and interpret the following figures Call price as a function of the current underlying price S0 or put price as a function of the current underlying price SO depending on the data assigned to you. Carefully interpret the figures. Make sure you are not simply describing the figures but that you are answering the question of why we observe the pattern

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS