You shorted a call option on Intuit stock with a strike price of $34. When you sold (wrote) the option, you received $6. The option will expire in exactly three months' time. a. If the stock is trading at $47 in three months, what will your payoff be? What will your profit be? b. If the stock is trading at $23 in three months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the payoff at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits. a. The payoff of the short is $, and the profit of the short is $ (Round to the nearest dollar.)
You shorted a call option on Intuit stock with a strike price of $34. When you sold (wrote) the option, you received $6. The option will expire in exactly three months' time. a. If the stock is trading at $47 in three months, what will your payoff be? What will your profit be? b. If the stock is trading at $23 in three months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the payoff at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits. a. The payoff of the short is $, and the profit of the short is $ (Round to the nearest dollar.)
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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solve a,b,c and d please. Round to the nearest dollar
Transcribed Image Text:You shorted a call option on Intuit stock with a strike price of $34. When you sold (wrote) the option, you received $6. The option will expire in exactly three months' time.
a. If the stock is trading at $47 in three months, what will your payoff be? What will your profit be?
b. If the stock is trading at $23 in three months, what will your payoff be? What will your profit be?
c. Draw a payoff diagram showing the payoff at expiration as a function of the stock price at expiration.
d. Redo c, but instead of showing payoffs, show profits.
a. The payoff of the short is $
(Round to the nearest dollar.)
and the profit of the short is $
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