Suppose you buy a January expiration put option on 200 shares with the exercise price of $45. If the stock price at optionexpiration is $42, will you exercise your put? What is the net profit/loss on your position? (Round your answer to the nearestdollars)ExpirationStrikeCallPutMay 20 20224014.210.12May 20 2022459.320.32May 20 2022504.81.05Jan 20 20234014.61.19Jan 20 20234510.52.14Jan 20 2023507.23.70Yes, net profit of $172O No, net profit of $457O No, net loss of $457O Yes, net loss of $172

solution concept Put option means the right to sell the stock Strike price means the price at which…

Answered: Suppose you buy a January expiration…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Intro A non dividend-paying stock currently trades at $80. You short sell one share of stock, buy a call option and write a put option, both with a strike price of $51. Your immediate cash inflow is $47.84. Both options expire in one year. Part 1 What is the risk-free rate? 3+ decimals
Consider April 2023 expiration call option on a share of AELZ stock with an exercise price of K95 per share selling on March 2, 2023 for K1.35. Exchange traded options expire on the third Friday of the expiration month, which for this option was April, 20. On March 2, AELZ sells for K90.90. Would you exercise the option? On April 20, AELZ sells for K96, what would be the value of the option at expiration? How much profit will the call holder make?
19. You buy a January put option now with a strike price of 350. If the stock price in January is $330, how much is your net profit or loss? * 0/4 Captionless Image A) Loss of $5.35 B) Gain of $20 C) Loss of $20 D) Loss of $25.35 E) None of the ab
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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?
Year 2018 2019 2020 2021 Beginning-of-Year Price $ 120 144 108 120 Dividend Paid at Year-End $4 4 An investor buys three shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all four remaining shares at the beginning of 2021. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) Answer is complete but not entirely correct. Arithmetic average rate of return Geometric average rate of return 2.08% 123%
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

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