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?
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
Not the answer you're looking for?
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.
ADVERTISEMENT
Active Questions
asked 36 minutes ago
asked 43 minutes ago
asked 47 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago
asked 3 hours ago