Use the following quotes for Target stock options:TickerBidTGT 3/18/22 C200 20.15TGT 3/18/22 C210 13.45TGT 3/18/22 C2208.35TGT 3/18/22 C2304.85TGT 3/18/22 C240 2.70TickerTGT 3/18/22 P200TGT 3/18/22 P210TGT 3/18/22 P220TGT 3/18/22 P230TGT 3/18/22 P240Source: Bloomberg Finance L.P.Bid5.00Ask5.158.30 8.5012.85 13.4519.15 19.8026.05 27.80Ask21.6013.808.655.152.95CallsIVMLast29.00y 35.0714.25 32.589.65 31.345.10 31.072.85 31.08Return on investment at $205Return on investment at $255PutsLastIVM34.1632.3512.55 31.3418.49 30.0625.83 28.444.958.35Volume16203516Assume you purchased the right to sell 2,000 shares of Target stock in March 2022 at a strike price of $230 per share. SupposeTarget stock sells for $205 per share immediately before your options' expiration. What is the rate of return on your investment? Whatis your rate of return if the stock sells for $255 per share (think about it)? Assume your holding period for this investment is exactlythree months.%%Volume1838695Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-month returns asa percent rounded to 2 decimal places.

Here,StrikePrice of Put is $230Premium on Put at $230 is $19.80Number of Shares is 2,000

Use the following quotes for Target stock options: Ticker Bid TGT 3/18/22 C200 20.15 TGT 3/18/22 C210 13.45 TGT 3/18/22 C220 TGT 3/18/22 C230 TGT 3/18/22 C240 8.35 4.85 2.70 Ask 21.60 13.80 8.65 5.15 2.95 Calls Last IVM 29.00y 35.07 14.25 32.58 9.65 31.34 5.10 31.07 2.85 31.08 Puts Ticker Bid Ask TGT 3/18/22 P200 5.00 5.15 TGT 3/18/22 P210 8.30 8.50 TGT 3/18/22 P220 12.85 13.45 TGT 3/18/22 P230 19.15 18.49 19.80 26.05 27.80 25.83 28.44 TGT 3/18/22 P240 Source: Bloomberg Finance L.P. Return on investment at $205 Return on investment at $255 Last 4.95 8.35 12.55 IVM 34.16 32.35 31.34 30.06 Volume 6056 % % 16 20 35 16 Volume 18 38 6 Assume you purchased the right to sell 2,000 shares of Target stock in March 2022 at a strike price of $230 per share. Suppose Target stock sells for $205 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 $255 per share (think about it)? Assume your holding period for this investment is exactly three months. 9 5 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.

Use the following quotes for Target stock options: Ticker Bid TGT 3/18/22 C200 20.15 TGT 3/18/22 C210 13.45 TGT 3/18/22 C220 TGT 3/18/22 C230 TGT 3/18/22 C240 8.35 4.85 2.70 Ask 21.60 13.80 8.65 5.15 2.95 Calls Last IVM 29.00y 35.07 14.25 32.58 9.65 31.34 5.10 31.07 2.85 31.08 Puts Ticker Bid Ask TGT 3/18/22 P200 5.00 5.15 TGT 3/18/22 P210 8.30 8.50 TGT 3/18/22 P220 12.85 13.45 TGT 3/18/22 P230 19.15 18.49 19.80 26.05 27.80 25.83 28.44 TGT 3/18/22 P240 Source: Bloomberg Finance L.P. Return on investment at $205 Return on investment at $255 Last 4.95 8.35 12.55 IVM 34.16 32.35 31.34 30.06 Volume 6056 % % 16 20 35 16 Volume 18 38 6 Assume you purchased the right to sell 2,000 shares of Target stock in March 2022 at a strike price of $230 per share. Suppose Target stock sells for $205 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 $255 per share (think about it)? Assume your holding period for this investment is exactly three months. 9 5 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.

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 that you have been given the following information on Purcell Corporation's call options: Inputs Intermediate Calculations Current stock price = $12 d1 = 0.32863 Time to maturity of option = 9 months d2 = 0.05477 Variance of stock return = 0.10 N(d1) = 0.62878 Strike price of option = $12 N(d2) = 0.52184 Risk-free rate = 7% According to the Black-Scholes option pricing model, what is the option's value? Do not round intermediate calculations. Round your answer to the nearest cent. Use only the values provided in the problem statement for your calculations. $
Basic Option Strategies Profit Computation Assume the below prices for calls and puts: Call Put Strike Jul Aug Oct Jul Aug Oct 165 2.7 5.25 8.1 2.4 4.75 6.75 170 0.8 3.25 6 5.75 7.5 1. Buy one August 170 call contract. Hold it until expiration. lIdentify the breakeven stock price at expiration. What is the profit/loss if ST=190? What is the maximum profit? 2. Buy one October 165 put contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185
A stock is currently priced at 43.75 when options are about to expire. What is the net profit of a CALL option with a strike price of 45 for the BUYER of the option if the premium paid was 1.75? (per share) Group of answer choices 1.75 0.00 -2.25 -1.75 45.00
A4 answer the questions below
Which of the following call options on XYZ stock is most valuable? 1. Strike price = $ 40, 3 months to expiration 2. Strike price = $ 40, 3 months to expiration 3. Strike price = $ 50, 6 months to expiration 4. Strike price = $ 50, 6 months to expiration
Q2 - Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6 7Stock X 4% -2% 5% -1% 10% 7% 12%Stock Y -3% 7% 4% 2% 2% 8% -3% Consider a portfolio of 10% stock X and 90% stock Y. What is the mean of portfolio returns? Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).
Tiempo restante U:28:23 What is the beta of a portfolio that has $18,400 in Stock M, $6,320 in Stock N, $32,900 in Stock O and $11,850 in Stock P. Their Betas are .97, 1.04, 1.23, and .88, respectivley? O a. 1.04 O b. 1.11 О с. 1.08 O d. 1.15 O e. .99
Problem 10-10 Calculating Real Returns and Risk Premiums [LO 1] You've observed the following returns on Pine Computer's stock over the past five years: -267 percent, 14.8 percent, 32.6 percent, 2.9 percent, and 21.9 percent. The average inflation rate over this period was 3.29 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real return on the stock? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What was the average nominal risk premium on the stock? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Average real return b. Average nominal risk premium i 7.09 % 6.35 %
5. A stock index is currently trading at 50.00. The annual index standard deviation is 20 percent. Paul Tripp, CFA, wants to value two-year index options using the binomial model. To correctly value the options, he needs the formulas in Exhibit 1. The annual risk-free interest rate is 6 percent. Assume no dividends are paid on any of the underlying securities in the index. Exhibit 1. e-D U = e = 1.2214 d==- π₂ where e 1.06184 U-D Where: U = up movement factor D = down movement factor T = probability of an upward price movement
am. 140.
Qd 246.

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