Question

Jane purchased 100 shares of Netflix, Inc. (Ticker: NFLX) at $288.94 today. At the same time,...

Jane purchased 100 shares of Netflix, Inc. (Ticker: NFLX) at $288.94 today. At the same time, she purchased a put option with exercise price at $270 and an expiration date on June 15, 2018. The premium for the put option is $15.15. (3 points)

What is Jane’s Break Even point?

Show the contingency graph and label each point.

What is Jane’s profit/loss if the stock price on the expiration date is (1) $200, (2) $300, (3) $400?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Breakeven price = 288.94 + 15.15 = $ 304.09

Profit/Loss:

1) $200 = -$34.09

2) $300 = -$4.09

3) $400 = $ 95.91

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Jane purchased 100 shares of Generic Inc. at $19.15 seven months ago. Generic has moved up...
Jane purchased 100 shares of Generic Inc. at $19.15 seven months ago. Generic has moved up a lot and closed at $27.98 today, she decided to purchase a put option. Today, she bought a put option with exercise price at $26 and an expiration date on June 15, 2020. The premium for the put option is $2.30. With her buying the put option on the stock she has already owned, what is the name of the investment strategy that she...
1 A Suppose the price of a share of Netflix (NFLX) on April 22, 2020 is...
1 A Suppose the price of a share of Netflix (NFLX) on April 22, 2020 is $421. A May 2020 call option on NFLX stock has a premium of $20 and an exercise price of $425. Ignoring commissions, the holder of the call option will earn a profit if the price of the share       A.       increases to $448.       B.       decreases to $403.       C.       increases to $442.       D.       decreases to $400. E.        both A and C...
Question 1 Khalid is a hedge fund investor at Puma Asset Management Company. He purchased stock...
Question 1 Khalid is a hedge fund investor at Puma Asset Management Company. He purchased stock index fund, currently selling at SR1, 200 per share. To protect against losses, Khalid pay put option premium for SR200 with exercise price of SR1, 200 and 3-month time to expiration. Ali is Khalid financial advisor point out that Khalid spends too much on the put options. He told Khalid to buy call options with strike price SR1, 200 and premium at 200 with...
You buy 300 shares of ABC stock at $53 per share. At the same time, you...
You buy 300 shares of ABC stock at $53 per share. At the same time, you write 300 call options on ABC stock with exercise price equal to $51 and call premium $6.92. Calculate your profit if ABC stock price at the expiration of the option is $48.06 per share. A. $594 B. -$594 C. -$1,482 D. $1,482 E. $692 You buy 320 call options with exercise price of $72 and call premium of $6.50. You write 640 call options...
40) You purchased 300 shares of a non-dividend paying stock for $25.2 a share 6 months...
40) You purchased 300 shares of a non-dividend paying stock for $25.2 a share 6 months ago. Today, you sold those shares for $36.1 a share. What was your percentage annualized rate of return on this investment? 41) You purchased 300 shares of SLG, Inc. stock at a price of $43.3 a share. You then purchased put options on your shares with a strike price of $40.00 and an option premium of $1.8. At expiration, the stock was selling for...
a. A speculator purchased a call option on Japanese Yen at a strike price of $0.70...
a. A speculator purchased a call option on Japanese Yen at a strike price of $0.70 and for a       premium of $.06 per unit. At the time the option was exercised if the Japanese Yen spot       rate was $.75 a) Find the speculator’s net profit per unit? b) If each contract is made up of 62500 units what is the net profit per contract? c) At which spot price will the speculator break even? d) What is the...
Walmard Inc. has purchased shares of Stock A at $12 per share. It will sell the...
Walmard Inc. has purchased shares of Stock A at $12 per share. It will sell the stock in a year. It considers using a strategy of covered call. The following information is the current market premium and exercise price for call and put options of Stock A. ​ Types of options Exercise price ($) Premium ($) Call 115 3 Put 110 4 ​ What is the Stock A break-even price if Walmard Inc. implements the covered call strategy? Walmard Inc....
3. You purchased 100 shares of JNJ stock at $50 per share. The stock is currently...
3. You purchased 100 shares of JNJ stock at $50 per share. The stock is currently selling at $45. You would like to lock up your total loss to no more than $700. Which of the following action will help you? OPTIONS; A. place a stop-buy order at $57 B. place a stop-loss order at $43 C. place a limit buy order at $53 D. place a limit sell order at $47 E. none of the above 4. Which of...
1. Louis purchased 300 shares of stock on margin for $22.15 a share and sold the...
1. Louis purchased 300 shares of stock on margin for $22.15 a share and sold the shares eleven months later for $24.50 a share. The initial margin requirement was 75 percent and the maintenance margin was 30 percent. The interest rate on the margin loan was 8.5 percent. He received no dividend income. What was his holding period return? Multiple Choice 8.45 percent 9.88 percent 10.76 percent 7.05 percent 11.56 percent 2.   You purchased six put option contracts with a...
please do all the three questions and show me all the calculations step by step and...
please do all the three questions and show me all the calculations step by step and the diagram also. 1. Assume you have purchased a June put option on British pounds: the strike price is $1.30/£; the option premium is $0.10/£; and it is European style. 1) Please fill out the blanks in the table. Spot rate at maturity (in June) Exercise or not? Net profit or payoff 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 2) Where is the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT