Question

A call option has an exercise price of $40 per share. If you bought the option for $3, draw a graph of the payout on the option as a function of the stock price. Label the graph.

Answer #1

Stock Price | Payoff from Call 40 Strike (A) | Cost of Call Option (B) | Profit/(Loss) (A-B) |

30 | 0 | 3 | -3 |

31 | 0 | 3 | -3 |

32 | 0 | 3 | -3 |

33 | 0 | 3 | -3 |

34 | 0 | 3 | -3 |

35 | 0 | 3 | -3 |

36 | 0 | 3 | -3 |

37 | 0 | 3 | -3 |

38 | 0 | 3 | -3 |

39 | 0 | 3 | -3 |

40 | 0 | 3 | -3 |

41 | 1 | 3 | -2 |

42 | 2 | 3 | -1 |

43 | 3 | 3 | 0 |

44 | 4 | 3 | 1 |

45 | 5 | 3 | 2 |

46 | 6 | 3 | 3 |

47 | 7 | 3 | 4 |

48 | 8 | 3 | 5 |

49 | 9 | 3 | 6 |

50 | 10 | 3 | 7 |

51 | 11 | 3 | 8 |

52 | 12 | 3 | 9 |

53 | 13 | 3 | 10 |

54 | 14 | 3 | 11 |

55 | 15 | 3 | 12 |

56 | 16 | 3 | 13 |

57 | 17 | 3 | 14 |

58 | 18 | 3 | 15 |

59 | 19 | 3 | 16 |

60 | 20 | 3 | 17 |

Suppose you bought a call option for $3 with an exercise price
of $50 and another call option for $2 with an exercise price of $60
per share. Draw a graph of the payout on the investment as a
function of the stock price. Label the graph.

A put option has an exercise price of $50 per share. Suppose you
sell the option for $2. Draw a graph of the payout on the option as
a function of the stock price. Label the graph.

A put option has an exercise price of $50 per share. Suppose you
sell the option for $2. Draw a graph of the payout on the option as
a function of the stock price. Label the graph.

You bought a call option on July 27,
2020 at the exercise price of $65. It expires on October 26, 2020.
The stock currently sells for $66., while the call option sells for
$6.
A stock that is currently selling
for $47 has the following six-month options
outstanding:
Strike Price
Market Price
Call Option
$45
$4
Call Option
$50
$1
Which option(s) is (are) in the money?
Which option(s) is (are) at the money?
Which option(s) is (are) out of...

Consider a call option with an exercise price of $40 and an
expiration date in December and a put option with an
exercise
price of $40 and an expiration date also in December, both on
a
stock that is currently selling for $37 per share. Calculate
how
much these options are in or out of the money

A stock is currently selling for $60 per share. A call option
with an exercise price of $65 sells for $3.71 and expires in three
months. If the risk-free rate of interest is 2.9 percent per year,
compounded continuously, what is the price of a put option with the
same exercise price?

A stock is currently selling for $60 per share. A call option
with an exercise price of $67 sells for $4.49 and expires in four
months. If the risk-free rate of interest is 2.7 percent per year,
compounded continuously, what is the price of a put option with the
same exercise price?

•A call option has an exercise price of $50.
What is the value of the call option at expiration if the stock
price is $35? $75?
•A put option has an exercise price of $30.
What is the value of the put option at expiration if the stock
price is $25? $40?

A stock is currently selling for $81 per share. A call option
with an exercise price of $83 sells for $4.05 and expires in three
months. If the risk-free rate of interest is 3 percent per year,
compounded continuously, what is the price of a put option with the
same exercise price? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
Put price $

A call option with an exercise price of $40 and three months to
expiration has a price of $4.10. The stock is currently priced at
$39.80, and the risk-free rate is 4 percent per year, compounded
continuously. What is the price of a put option with the same
exercise price? (Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
Put option price= __________

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