UnderlyingMicrosoft (MSFT)Price: 295.71ExpirationStrikeCallPut1-Oct-20212909.433.631-Oct-20213003.607.821-Oct-20213101.0815.2817-Dec-202129017.2511.7217-Dec-202130011.7516.2517-Dec-20213107.6222.05 Use Figure 20.1, which lists prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profits forinvestments in each of the following December 17 expiration options, assuming that the stock price on the expiration date is $300.Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter"O" wherever required. Negative amounts should be indicated by a minus sign.a. Call option, X = $290b. Put option, X = $290c. Call option, X = $300d. Put option, X = $300e. Call option, X = $310f. Put option, X = $310PayoffProfit or Loss

In the context of option trading, the payoff and profit or loss from call and put options are…

Answered: Underlying Microsoft (MSFT) Price:…

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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Assume you are given the following abbreviated financial statement. (look at the picture sent) On the basis of this information, calculate as many liquidity, activity, leverage, profitability, and common stock measures as you can. (Note: Assume the current market price of the common stock is $75 per share.)
Draw the payoff of a call option on an Apple stock with a current price of $90, a strike price of $110 and the cost of the option being $10. Make sure you label your graph properly. (Use Excel to create your graph)
Only typing. .... . A strip is a variation of a straddle involving two puts and one call. Construct a short strip using the August 170 options. The price of the call option is $8.10 and the price of the put option is $6.75. Hold the position until the options expire. Determine the profits and graph the results. Identify the breakeven stock prices at expiration and the minimum profit.
The following table lists prices of Amazon options in January 2018 when Amazon stock was selling for $1,200. Exercise Price Expiration Date April 2018 Call Price Put Price $ 31.10 $1,200 1,300 1,400 $1,200 1,300 1,400 $1,200 1,300 1,400 $132.70 73.20 70.10 134.20 $ 53.55 96.00 33.00 July 2018 $161.70 104.00 62.55 156.05 January 2019 $210.00 $ 88.05 155.35 133.25 112.00 190.00 Suppose that by January 2019, the price of Amazon could either rise from its January 2018 level to $1,200 × 1.25 = $1,500.00 or fall to $1,200/1.25 = $960.00. a. What would be your percentage return on a January expiration call option with an exercise price of $1,200 if the stock price rose? (Round your answer to 2 decimal places.) b. What would be your percentage return if the stock price fell? (Negative value should be indicated by a minus sign.) c. Which is riskier: the stock or the option? a. Percentage return b. Percentage return Which is riskier: the stock or the option? % (100) % Option C.
Consider the three stocks in the following table. P+ represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. PO 98 58 100 51 103 e 200 116 200 53 126 100 200 200 103 100 53 63 200 400 Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round Intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted Index Rate of return An equally weighted index ate of return % %
You write a put with a strike price of $60 on stock that you have shorted at $60 (this is a “covered put”). What are the expiration date profits to this position for stock prices of $50, $55, $60, $65, and $70 if the put premium is $1.80? (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places.) Stock price Short profit Put payoff Put profit Net profit $50.00 $55.00 $60.00 $65.00 $70.00
Vijay
You are given the following information concerning the trades made on a particular stock. Calculate the money flow for the stock based on these trades. Note: Leave no cells blank - be certain to enter "O" wherever required. A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole number. Price $ 30.33 Volume 30.36 3,600 30.34 3,100 30.33 3,500 29.34 3,650 30.33 4,400 30.24 4,700 Price Up or Down Price Times Volume Positive Money Flow Negative Money Flow Net Money Flow $ 30.33 30.36 30.34 30.33 29.34 30.33 30.24 Money flow at the end of the day
Below you will find the closing stock prices for Auction Makers over a three-week period. Calculate the simple three-day and five-day moving averages for the stock and graph your results. Are there any technical indications of the future direction of the stock price? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Week Day 1 Monday Close $ 38.35 Tuesday Wednesday Thursday 38.17 37.77 38.03 IHI! Friday 37.29 Monday 37.46 Tuesday 37.53 Wednesday 37.57 Thursday 38.26 Friday 38.36 Monday 38.29 Tuesday 38.45 Wednesday 38.78 Thursday 38.93 Friday 38.76
If Stock Z is correctly priced, you can infer that the expected market return is ____%. Do not round any intermediate work, but round your final answer to 2 decimal places (example: enter 12.34 for 12.34%). Do not enter the % sign. Margin of error for correct responses: +/- .05 expected return (implied by market price) Beta Stock Z 12% 1.48 T-bonds 5%
You simultaneously write a put and buy a call, both with strike prices of $45, naked, i.e., without any position in the underlying stock. What are the expiration date payoffs to this position for stock prices of $35, $40, $45, $50, and $55? (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.) $ $ $ $ $ Stock price 35 40 45 50 55 Put payoff Call payoff Total payoff

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