You bought a call option at strike $ 60 for a price of $ 6 and sold a put option at strike $ 70 for a price of $2.5, both options with the same maturity. The underlying stock currently trade for $61. Your breakeven point is? Group of answer choices 66.50 63.50 61.00 64.50

Q: A stock price is $30. An investor buys one call option contract on the stock with a strike price of…

A: Break-even refers to the point at which total revenue equals total costs, resulting in neither…

Q: Question 2. Suppose that put options on a stock with strike prices $30 and $35 cost $4 and $7,…

A: Put option:A put option is a financial instrument that gives the holder the right, but not the…

Q: Consider two put options on the same stock. One has a strike price of 58 and the other has a strike…

A: The objective of the question is to determine which of the two put options would be more expensive…

Q: 0 Stock: So= 80 1 100 72 2 120 90 86.4 64 8

A: Put option gives the option to sell stock on expiration but there is no obligation to do that any…

Q: Of the following four call options that can be purchased on a stock, which would you expect to have…

A: A call option gives the right but not the obligation to purchase the stocks or a particular…

Q: Consider a stock with the current market price equal to So. A trader buys a call optic the stock…

A: Call and put option are used for hedging position in market.

Q: You buy call options on J. Milroe Inc Stock. Currently, the stock is priced at $45/share. The call…

A: Profit/loss = payoff- premium paidProfit/loss= Max of (0, spot rate- strike price) - premium paid

Q: Suppose that you hold a call option on S&P 500 Index ETF with an exercise price of $450 and a put…

A: Here,Exercise Price of Call Option is $450Exercise Price of Put Option is $430Spot Price is $460

Q: A put with 1-year to maturity is written on a stock. The current underlying stock price is $20. The…

A: The put-call parity refers to the relationship between the prices of the call and the put options…

Q: Whats the profit of the "Straddle" when stock price is $15, $20, $25, $30, $35, $40, $45, $50, $55,…

A: In the given question we require to calculate the profit of the "Straddle" when stock price is $15,…

Q: Consider a pair of call and put options with the same expiration date but different strike prices.…

A: We have to take a position in the call and put options. We have to plot the profit/(loss) from the…

Q: Suppose that put options on a stock with strike prices $18 and $20 cost $2 and $3.50, respectively.…

A: A put option provides the right for selling the stock at a specified price but not the obligations…

Q: Followings are the strike prices and the relevant options prices for both put and call options. All…

A: A butterfly strategy with calls is a popular option investment strategy with the use of four call…

Q: Finance 5. Can you replicate the payoff of a call option (create a synthetic call), using a bond, a…

A: Data given:: S=$40 X=$40  rf=6%  T=1 p=$3 Required: c=cost to establish this call position

Q: 20. A call and put options on ABC stock are available with exercise prices of $60, $45, $40 and $78.…

A: Given, Exercise prices - $60, $45, $40 and $78

Q: You have a portfolio of options on the same underlying as follows. Each option controls 100 shares.…

A: A portfolio of options have been provided. The portfolio comprises of long and short positions in…

Q: An investor buys a Put option with exercise price 100 on ABC shares for 9p when the share price is @…

A: Exercise price = 100pCurrent stock price  = 95pOption price = 9p

Q: Suppose you write 32 put option contracts with a $60 strike. The premium is $2.40. Evaluate your…

A: Number of put options: 32Put option premium: $2.40Strike price: $60

Q: Suppose that a trader buys two call options and one put option. A one-year call option on a stock…

A: Call is in the money when prices go up from strike prices and put is in the money option when prices…

Q: 25. Boricua stock is currently trading at a market price (S) of $95. You do not own the stock, but…

A: A call option starts making profit when the spot crosses or gains beyond the break even point. The…

Q: Q4 Using the Put-Call Parity relationship, find the value of a put option (same strike, expiration…

A: By using the call put parity relationship, the value of a put option has to be determined. This is a…

Q: An investor purchases a call option on ABC stock with a strike price of $50 for a premium of…

A: An option contract offers its buyer to buy or sell the underlying asset at a preset price on a…

Q: You have a portfolio of options on the same underlying as follows. Each option controls 100 shares.…

A: Volatility skew refers to the phenomenon whereby options with the same expiration date and…

Q: Use the Black - Scholes formula to find the value of a call option based on the following input.…

A: Time to expiration (T) =  0.5 year     Standard deviation (σ) =  20%       Exercise price (X) =…

Q: You have six investment options based on the following three given stocks (X, Y, and Z): State of…

A: Based on the data provided in the question, X and Y have the lowest risk or standard deviation…

Q: Consider the following options on the same stock. They all expire the same day. Based on what you…

A: Call options are a derivative instrument which gives the investors the right but not the obligation…

Q: In follow an Ito process with >0, a stock is worth $80 today, if the price of an option that pays…

A: To price the option, we need to use the Black-Scholes formula, which is a mathematical formula used…

Q: A stock with a current price of $22 will either move up to $32.00 or down to $15 over the next…

A: Determining value of call option using Risk Neutral Method :Calculation of probability :Risk free…

Q: A 45 call option on a stock priced at $50 is priced at $8.50. This call has an intrinsic value of…

A: Option premium = $8.50 Strike price = $45 Stock price = $50 Intrinsic value = ? Time value = ?

Q: A Call option with X = 100 on PQR shares, priced @ 95p has a premium of 7p. What is the fair Put…

A:

Q: Suppose you own a put option on Apple stock with a strike price of $150. Suppose it is the…

A: Stock price at expiration = $75Exercise price = $150

Q: 38. Suppose a stock is currently trading at $50. The risk-free rate is 2%. Consider the following…

A: The objective of this question is to calculate the value of a call option using a one-period…

Q: Suppose that a short-term government bond has a face value of $100. If the price of that bond is…

A: The face value is the price that a bond issuer pays to the bond holder at the time of maturity. Here…

Q: Consider the following options on stock X: Option Delta Gamma Vega A 0.5 2.2 1.8 В 0.8 0.6 0.2 -0.40…

A: Solution- Option Delta Gamma Vega Quantity Position A 0.5 2.2 1.8 1,000 LONG B 0.8 0.6 0.2…