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The Happy Orange Storage Company stock was selling at $40 per share on the first day of this month. • If you had a put option on the first of the month • If you had a call option on the first of the month with an exercise price of $36 and if the option with an exercise price of $36 and if the option also expires on the first, the value of the option also expires on the first, the value of the option would be would be • If the put option expires in six months and the • If the call option expires in six months, the value market expects the stock price to decrease, the of the option is likely to be than the value of the option is likely to difference in the stock price and exercise price of the call option at expiration. Now suppose you have another call option and a put option. The selling price of Happy Orange's stock is $40 per share on the first day of this month and the exercise price for both the call and put options is $48. • If the exercise price of the put option is $48 and • If the exercise price of the call option is $48 and the option expires on the first, the value of the the option expires on the first, the value of the option is option is • If the put option expires in six months and the • If the call option expires in six months and the market expects the stock price to increase, the market expects the stock price to increase, the value of the put option is likely to value of the call option is likely to

The Happy Orange Storage Company stock was selling at $40 per share on the first day of this month. • If you had a put option on the first of the month • If you had a call option on the first of the month with an exercise price of $36 and if the option with an exercise price of $36 and if the option also expires on the first, the value of the option also expires on the first, the value of the option would be would be • If the put option expires in six months and the • If the call option expires in six months, the value market expects the stock price to decrease, the of the option is likely to be than the value of the option is likely to difference in the stock price and exercise price of the call option at expiration. Now suppose you have another call option and a put option. The selling price of Happy Orange's stock is $40 per share on the first day of this month and the exercise price for both the call and put options is $48. • If the exercise price of the put option is $48 and • If the exercise price of the call option is $48 and the option expires on the first, the value of the the option expires on the first, the value of the option is option is • If the put option expires in six months and the • If the call option expires in six months and the market expects the stock price to increase, the market expects the stock price to increase, the value of the put option is likely to value of the call option is likely to

Essentials Of Investments
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
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The Happy Orange Storage Company stock was selling at $40 per share on the first day of this month. If you had a put option on the first of the month If you had a call option on the first of the month with an exercise price of $36 and if the option with an exercise price of $36 and if the option also expires on the first, the value of the option also expires on the first, the value of the option would be would be • If the call option expires in six months, the value of the option is likely to be If the put option expires in six months and the market expects the stock price to decrease, the than the value of the option is likely to difference in the stock price and exercise price of the call option at expiration. Now suppose you have another call option and a put option. The selling price of Happy Orange's stock is $40 per share on the first day of this month and the exercise price for both the call and put options is $48. If the exercise price of the put option is $48 and If the exercise price of the call option is $48 and the option expires on the first, the value of the the option expires on the first, the value of the option is option is If the put option expir in six months and the If the call opt expires in six months and the market expects the stock price to increase, the market expects the stock price to increase, the value of the put option is likely to value of the call option is likely to
Transcribed Image Text:The Happy Orange Storage Company stock was selling at $40 per share on the first day of this month. If you had a put option on the first of the month If you had a call option on the first of the month with an exercise price of $36 and if the option with an exercise price of $36 and if the option also expires on the first, the value of the option also expires on the first, the value of the option would be would be • If the call option expires in six months, the value of the option is likely to be If the put option expires in six months and the market expects the stock price to decrease, the than the value of the option is likely to difference in the stock price and exercise price of the call option at expiration. Now suppose you have another call option and a put option. The selling price of Happy Orange's stock is $40 per share on the first day of this month and the exercise price for both the call and put options is $48. If the exercise price of the put option is $48 and If the exercise price of the call option is $48 and the option expires on the first, the value of the the option expires on the first, the value of the option is option is If the put option expir in six months and the If the call opt expires in six months and the market expects the stock price to increase, the market expects the stock price to increase, the value of the put option is likely to value of the call option is likely to
The Chicago Board Options Exchange (CBOE) is one of the world's largest options exchanges. CBOE and other options exchanges trade contracts that give buyers and sellers the right to trade investment assets at a specific price within a specific time period. А option gives the option holder the right to sell an asset at a fixed price during a particular period. The fixed price that the asset may be sold at is called the exercise price. The following table shows the options quotation in U.S. dollars for Happy Orange Storage Company for June 30 of this year. Call Last Quote Put - Last Quote Option Closing Price Strike Price September September 1 $49.50 $53.50 $4.00 $4.40 2 $49.50 $45.50 $6.00 $2.40 3 $49.50 $55.50 $3.20 $5.20 If you could exercise the options listed anytime on or before the expiration date (the third Friday of September), then these options would be options. Assume that the options listed in the table are American options. Which of the put options for Happy Orange Storage Company listed in the table are in-the-money on June 30? Option 1 and option 3 Only option 2 All of the options None of the options The Happy Orange Storage Company stock was selling at $40 per share on the first day of this month. If you had a put option on the first of the month If you had a call option on the first of the month
Transcribed Image Text:The Chicago Board Options Exchange (CBOE) is one of the world's largest options exchanges. CBOE and other options exchanges trade contracts that give buyers and sellers the right to trade investment assets at a specific price within a specific time period. А option gives the option holder the right to sell an asset at a fixed price during a particular period. The fixed price that the asset may be sold at is called the exercise price. The following table shows the options quotation in U.S. dollars for Happy Orange Storage Company for June 30 of this year. Call Last Quote Put - Last Quote Option Closing Price Strike Price September September 1 $49.50 $53.50 $4.00 $4.40 2 $49.50 $45.50 $6.00 $2.40 3 $49.50 $55.50 $3.20 $5.20 If you could exercise the options listed anytime on or before the expiration date (the third Friday of September), then these options would be options. Assume that the options listed in the table are American options. Which of the put options for Happy Orange Storage Company listed in the table are in-the-money on June 30? Option 1 and option 3 Only option 2 All of the options None of the options The Happy Orange Storage Company stock was selling at $40 per share on the first day of this month. If you had a put option on the first of the month If you had a call option on the first of the month
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