Question

Dorothy buys a Call option on S&P 100 index for $5.25 at an exercise price of...

Dorothy buys a Call option on S&P 100 index for $5.25 at an exercise price of 675. The current value of S&P 100 index is 700. How much would be Dorothy's Holding period Return if the S&P 100 index goes down to 665 by the date of expiration?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

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
Consider a call option with an exercise price of $40 and an expiration date in December...
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 call option has an exercise price of $50. What is the value of the call...
•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?
You are attempting to value a call option with an exercise price of $150 and one...
You are attempting to value a call option with an exercise price of $150 and one year to expiration. The underlying stock pays no dividends. Its current price is $100. The stock price either increases by a factor of 1.5, or decreases by a factor of 0.5, every six months. The risk-free rate of interest is 2% per year (or 1% per six-month period). What is the value of this call option using the two-period binomial option pricing model? (Do...
A call option with an exercise price of $110 has six months to the expiration date....
A call option with an exercise price of $110 has six months to the expiration date. Currently, the stock is sold at a price of $120. At the expiration date, the underlying stock has two possible ending prices: $150 or $105. The risk-free rate of return is 8 percent per annum. Calculate the price of this call option using binomial option pricing model.
currently, a call option on Bayou stock is available with an exercise price of $100 and...
currently, a call option on Bayou stock is available with an exercise price of $100 and an expiration date one year from now. Assume that the price of Bayou corporation stock today is $100. Furthermore, it is estimated that Bayou stock will be selling for either $75 or $143 in one year. Also, assume that the annual risk-free interest rate on a one year Treasury bill is 10 percent, continuously compounded. Therefore, the T-bill will pay $100 x e^(0.1), or...
Currently, a call option on Bayou stock is available with an exercise price of $100 and...
Currently, a call option on Bayou stock is available with an exercise price of $100 and an expiration date one year from now. Assume that the price of Bayou Corporation stock today is $100. Furthermore, it is estimated that Bayou stock will be selling for either $62 or $152 in one year. Also, assume that the annual risk-free interest rate on a one-year Treasury bill is 10 percent, continuously compounded. Therefore, the T-bill will pay $100 × e^(0.1), or $110.25....
You bought a call option on July 27, 2020 at the exercise price of $65. It...
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...
Citigroup buys a call option on euros (contract size is €600,000) at a premium of $0.02...
Citigroup buys a call option on euros (contract size is €600,000) at a premium of $0.02 per euro. If the exercise price is $1.44/€ and the spot price of the euro at date of expiration is $1.48/€, A. Will this option be exercised, that is, is in-the-money or out-of-the-money? Why? (2 points) B. What is Citigroup's profit (or loss) on the call option? (3 points)
When the exercise price goes up, the price of the call option on the stock will...
When the exercise price goes up, the price of the call option on the stock will ______; and the price of the put option on the stock will ________. (go up/ go down)
An investor buys a strangle on a JEDI stock by buying one call option with an...
An investor buys a strangle on a JEDI stock by buying one call option with an exercise price of $20 for $1 and buying one put option with an exercise price of $18 for $3. (above relates to the questions below) (please show workings) 1. If JEDI’s expiration date stock price is $15, the investor’s profit is: (a) -$1 (b) $1 (c) $5 (d) -$7. 84. 2. If JEDI’s expiration date stock price is $20, the investor’s profit is: (a)...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT