Question
Question 3 The following information is available on company ABC. &n
Question 3
The following information is available on company ABC.
CALLS PUTS
ABC X MAR APR MAY MAR APR MAY
119 120 6 8 11 1 3 4
119 125 2 5 8 2 4 6
119 130 1 3 6 5 7 9
You create a (long) straddle using the May maturity and the strike price of $120. What is the cash flow at maturity (CFT) if the stock price of ABC at the May expiration is $122?
|
None of these answers are correct |
||
|
+$100 |
||
|
-$100 |
||
|
+$300 |
||
|
-$300 |
Homework Answers
Answer #1
Correct answer: None of these answers are correct.
A long straddle is a combination of buying a call and buying a put, both with the same strike price and expiration.
May Call Strike price(X) = $120
May Put Strike price(X) = $120
Stock Price on expiration(S) = $122
1 option contract = 100 shares
Cash Flow of Long straddle at maturity:
Not the answer you're looking for?
Similar Questions
The following information is available on company ABC. &
The following information is available on company ABC.
CALLS
PUTS
ABC X MAR
APR MAY MAR
APR MAY
119 120 6 8 11 1 3 4
119 125 2 5 8 2 4 6
119 130 1 3 6 5 7 9
You create a (long) straddle using the May maturity and the
strike price of $120. What is the cash flow at maturity
(CFT) if the stock price of ABC at the May expiration is
$122?
None of these answers are correct
+$100
-$100
-$300
+$300
The following information is available on company ABC. CALLS&
The following information is available on company ABC.
CALLS PUTS
ABC X MAR
APR MAY MAR
APR MAY
119 120 6 8 11 1 3 4
119 125 2 5 8 2 4 6
119
130 1 3 6 5 7 9
A bear money spread using the May 125 and 130 calls would
involve what cash flow at maturity (CFT) if the stock
price of ABC at the May expiration is $127?
None of these answers are correct
CFT =- $200
CFT = - $300
CFT = + $100
CFT = - $100
The following information is available on company ABC. CALLS &
The following information is available on company ABC.
CALLS
PUTS
ABC X MAR
APR MAY MAR
APR MAY
119 120 6 8 11 1 3 4
119 125
2 5 8 2 4 6
119 130 1 3 6 5 7 9
You create a (long) straddle using the May maturity and the
strike price of $120. What are the breakeven stock prices at
expiration for this straddle?
None of these answers are correct
$100 and $125
$105 and $135
$110 and $130
$95 and $115
A stock is currently priced at $130. The following options, with expiration in 4 months, are...
A stock is currently priced at $130. The following options, with
expiration in 4 months, are available:
K
c
p
120
12.80
1.85
125
8.65
3.11
130
5.05
4.85
135
2.61
7.55
140
1.10
11
Use call options with strike prices of 130 and 135 to create a
bull spread. What is the breakeven stock price (in 4 months)?
A stock is currently priced at $130. The following options, with expiration in 4 months, are...
A stock is currently priced at $130. The following options, with
expiration in 4 months, are available:
K
c
p
120
12.80
1.85
125
8.65
3.11
130
5.05
4.85
135
2.61
7.55
140
1.10
11
Use put options with strike prices of 125 and 135 to create a
bear spread.
(a) If the stock price in 3 months is $128, what is your
payoff?
(b) What is your maximum possible payoff and when does it
occur?
To protect an existing stock position, some traders like to use a position known as a...
To protect an existing stock position, some traders like to use
a position known as a collar. When traders have a long position in
the stock, they create the collar by combining covered calls and
protective puts. Therefore the upside potential is limited beyond
the strike price of the short call while the downside is protected
by the long put. Suppose you purchased 100 shares of stock ABC at
$13 in May and would like a way to protect your...
The following prices are available for call and put options on a stock priced at $50....
The following prices are available for call and put options on a
stock priced at $50. The risk-free rate is 6 percent and the
volatility is 0.35. The March options have 90 days remaining and
the June options have 180 days remaining.
Strike
March (calls)
June (calls)
March (puts)
June (puts)
45
6.84
8.41
1.18
2.09
50
3.82
5.58
3.08
4.13
55
1.89
3.54
6.08
6.93
Use this information to answer the following questions. Assume
that each transaction consists of...
Use the option quote information shown here to answer the questions that follow. The stock is...
Use the option quote information shown here to answer the
questions that follow. The stock is currently selling for
$73.
Option and
Calls
Puts
NY Close
Expiration
Strike Price
Vol.
Last
Vol.
Last
RWJ
Mar
68
243
4.50
173
4.60
Apr
68
183
10.35
140
9.35
Jul
68
152
11.20
56
12.80
Oct
68
73
12.10
24
11.75
a-1. Are the call options in or out of the
money?
In
Out
a-2. What is the intrinsic value of an RWJ...
The following prices are available for call and put options on a stock priced at $50....
The following prices are available for call and put options on a
stock priced at $50. The risk-free rate is 6 percent and the
volatility is 0.35. The March options have 90 days remaining and
the June options have 180 days remaining.
Calls
Puts
Strike
March
June
March
June
45
6.84
8.41
1.18
2.09
50
3.82
5.58
3.08
4.13
55
1.89
3.54
6.08
6.93
Use this information to answer the following questions. Assume
that each transaction consists of one contract...
se the option quote information shown here to answer the questions that follow. The stock is...
se the option quote information shown here to answer the
questions that follow. The stock is currently selling for $67.
Calls Puts Option and NY Close Expiration Strike Price Vol. Last
Vol. Last RWJ Mar 61 237 3.90 167 4.00 Apr 61 177 9.75 134 8.75 Jul
61 146 10.60 50 11.90 Oct 61 67 11.50 18 11.15 a-1. Are the call
options in or out of the money? In Out a-2. What is the intrinsic
value of an RWJ...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 1 minute ago
asked 12 minutes ago
asked 17 minutes ago
asked 46 minutes ago
asked 50 minutes ago
asked 51 minutes ago
asked 53 minutes ago
asked 58 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago