Use the following quotes for Target stock options: Calls Ticker Bid Ask Last IVM Volume TGT 3/18/22 C200 20.15 21.60 29.00 35.07 TGT 3/18/22 C210 13.45 13.80 14.25 32.58 16 TGT 3/18/22 C220 8.35 8.65 9.65 31.34 20 TGT 3/18/22 C230 4.85 5.15 5.10 31.07 35 TGT 3/18/22 C240 2.70 2.95 2.85 31.08 16 Puts Ticker Bid Ask Last IVM Volume TGT 3/18/22 P200 5.00 5.15 4.95 34.16 18 TGT 3/18/22 P210 8.30 8.50 8.35 32.35 38 TGT 3/18/22 P220 12.85 13.45 12.55 31.34 6 TGT 3/18/22 P230 19.15 19.80 18.49 30.06 9 TGT 3/18/22 P240 26.05 27.80 25.83 28.44 5 Source: Bloomberg Finance L.P. Assume you purchased the right to sell 2,300 shares of Target stock in March 2022 at a strike price of $210 per share. Suppose Target stock sells for $197 per share immediately before your options' expiration. What is the rate of return on your investment? What is your rate of return if the stock sells for $220 per share (think about it)? Assume your holding period for this investment is exactly three months. Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3- month returns as a percent rounded to 2 decimal places. Return on investment at $197 Return on investment at $220 % %
Use the following quotes for Target stock options: Calls Ticker Bid Ask Last IVM Volume TGT 3/18/22 C200 20.15 21.60 29.00 35.07 TGT 3/18/22 C210 13.45 13.80 14.25 32.58 16 TGT 3/18/22 C220 8.35 8.65 9.65 31.34 20 TGT 3/18/22 C230 4.85 5.15 5.10 31.07 35 TGT 3/18/22 C240 2.70 2.95 2.85 31.08 16 Puts Ticker Bid Ask Last IVM Volume TGT 3/18/22 P200 5.00 5.15 4.95 34.16 18 TGT 3/18/22 P210 8.30 8.50 8.35 32.35 38 TGT 3/18/22 P220 12.85 13.45 12.55 31.34 6 TGT 3/18/22 P230 19.15 19.80 18.49 30.06 9 TGT 3/18/22 P240 26.05 27.80 25.83 28.44 5 Source: Bloomberg Finance L.P. Assume you purchased the right to sell 2,300 shares of Target stock in March 2022 at a strike price of $210 per share. Suppose Target stock sells for $197 per share immediately before your options' expiration. What is the rate of return on your investment? What is your rate of return if the stock sells for $220 per share (think about it)? Assume your holding period for this investment is exactly three months. Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3- month returns as a percent rounded to 2 decimal places. Return on investment at $197 Return on investment at $220 % %
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
Related questions
Question
am. 140.
Transcribed Image Text:Use the following quotes for Target stock options:
Calls
Ticker
Bid
Ask
Last
IVM Volume
TGT 3/18/22 C200
20.15
21.60
29.00
35.07
TGT 3/18/22 C210
13.45
13.80
14.25
32.58
16
TGT 3/18/22 C220
8.35
8.65
9.65
31.34
20
TGT 3/18/22 C230
4.85
5.15
5.10
31.07
35
TGT 3/18/22 C240
2.70
2.95
2.85
31.08
16
Puts
Ticker
Bid
Ask
Last
IVM
Volume
TGT 3/18/22 P200
5.00
5.15
4.95
34.16
18
TGT 3/18/22 P210
8.30
8.50
8.35
32.35
38
TGT 3/18/22 P220
12.85
13.45
12.55
31.34
6
TGT 3/18/22 P230
19.15
19.80
18.49
30.06
9
TGT 3/18/22 P240
26.05 27.80
25.83
28.44
5
Source: Bloomberg Finance L.P.
Assume you purchased the right to sell 2,300 shares of Target stock in March 2022 at a strike price of $210 per share.
Suppose Target stock sells for $197 per share immediately before your options' expiration. What is the rate of return on
your investment? What is your rate of return if the stock sells for $220 per share (think about it)? Assume your holding
period for this investment is exactly three months.
Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-
month returns as a percent rounded to 2 decimal places.
Return on investment at $197
Return on investment at $220
%
%
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