You wish to build a synthetic long call for Microsoft stock with a strike price of $40.00 and an expiration of March. Microsoft stock currently sells for $40. The March 40 call for MSFT has a premium of $1.25, while the March 40 put for MSFT has a premium of $3.75. What will be the value of your position if at expiration Microsoft stock is selling for $45.00? Assume one contract on the option. Enter loss as a negative number.

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
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You wish to build a synthetic long call for Microsoft stock with a strike price of
$40.00 and an expiration of March. Microsoft stock currently sells for $40. The
March 40 call for MSFT has a premium of $1.25, while the March 40 put for
MSFT has a premium of $3.75.
What will be the value of your position if at expiration Microsoft stock is selling for
$45.00? Assume one contract on the option. Enter loss as a negative number.
Transcribed Image Text:You wish to build a synthetic long call for Microsoft stock with a strike price of $40.00 and an expiration of March. Microsoft stock currently sells for $40. The March 40 call for MSFT has a premium of $1.25, while the March 40 put for MSFT has a premium of $3.75. What will be the value of your position if at expiration Microsoft stock is selling for $45.00? Assume one contract on the option. Enter loss as a negative number.
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