Question

At the opening of the market, a call on Tesla, with strike $1050, is trading at...

At the opening of the market, a call on Tesla, with strike $1050, is trading at $80, while a put on Tesla with strike $1050 is trading at $60. Both call and put have the same 5 year expiry. If, at the close of the market on the same day, the call is trading at $90, while the put is trading at $55, Tesla's closing market price is _____ the opening market price? Prevailing interest rate in the market was unchanged during the day.

None of the above

Same as                   

Lesser than                

Greater than             
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans: greater than

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
At the opening of the market, a call on Google, with strike $1050, is trading at...
At the opening of the market, a call on Google, with strike $1050, is trading at $80, while a put on Google with strike $1050 is trading at $60. Both call and put have the same 5 year expiry. If, at the close of the market on the same day, the call is trading at $90, while the put is trading at $55, Google’s closing market price is _____ the opening market price? Prevailing interest rate in the market was...
a.    As the stock’s price decreases, a call option on the stock ___________ in value. b.   ...
a.    As the stock’s price decreases, a call option on the stock ___________ in value. b.    As the stock’s price decreases, a put option on the stock ___________ in value. c.     Given two put options on the same stock with the same time to expiration, the put with the lesser strike price will cost ________ than the put option with the lower strike price. d.    Given two call options on the same stock with the same time to expiration, the...
Suppose the price of an asset is $50 per unit. A Call option on the asset...
Suppose the price of an asset is $50 per unit. A Call option on the asset with a strike price of $55 is trading in the market at a premium of $2, a Put option on the asset with a strike price of $45 is trading in the market at a premium of $8, and a forward contract on the asset is trading at a price of $52. All derivatives contracts are on 1 unit of the asset and all...
1- A one-year European call option on Stanley Industries stock with a strike price of $55...
1- A one-year European call option on Stanley Industries stock with a strike price of $55 is currently trading for $75 per share. The stock pays no dividends. A one-year European put option on the stock with a strike price of $55 is currently trading for $100. If the risk-free interest rate is 10 percent per year, then what is the current price on one share of Stanley stock assuming no arbitrage? 2- The current price of MB Industries stock...
Consider a European-style call option on a stock that is currently trading at £100. The strike...
Consider a European-style call option on a stock that is currently trading at £100. The strike price of the call is £90. Assume that, in the next 12 months, the stock price can either go up to £120 or go down to £80. Using risk-neutral valuation, calculate the current value of the option if the risk-free rate is 5 percent per annum. Use discrete compounding. Which of the following is correct? A. £18 B. £18.5 C. £18.75 D. £19
Yallow Company's stock is trading at $30 a share. Call options on the company's stock are...
Yallow Company's stock is trading at $30 a share. Call options on the company's stock are also available, one with a strike price of $25 and one with a strike price of $35. Both options expire in three months. Which of the following best describes the value of these options? If Yallow's stock price rose by $5, the exercise value of the options with the $25 strike price would also increase by $5. The options with the $25 strike price...
An American call option on a non-dividend-paying stock is currently trading in the CBOT market. The...
An American call option on a non-dividend-paying stock is currently trading in the CBOT market. The price of the underlying stock is $36, the option strike price is $30, and the option expiration date is in three months. The risk free interest rate is 8% a. Calculate the upper and lower bounds for the price of this American call option --> Calculated as max (So - Ke^ -rT, 0) b. Explain the arbitrage opportunities presented to an arbitrageur when this...
You are interested in a trading strategy with option combinations: straddle or strangle. Both strategies involve...
You are interested in a trading strategy with option combinations: straddle or strangle. Both strategies involve buying the equal amount of call and put options underlying the same stock. Consider a straddle using a call with a strike price of $100 and a put with the same strike price and expiration date. The call costs $5 and the put costs $4. For what range of stock prices would the straddle lead to a loss? Now consider a strangle using the...
based on the following options data for XYZ Corporation:              ------Call------ or------Put------ Market price   Strike   Exp.    ...
based on the following options data for XYZ Corporation:              ------Call------ or------Put------ Market price   Strike   Exp.     38.625 25 Dec.                 38.625               30     Nov.              38.625               30     Dec.                 38.625               35     Nov.              38.625               35     Dec.                 38.625               35     Mar.                 38.625               40     Nov. 1.         Which of the above calls is not “in-the-money?” 2.         Of the various combinations shown above, how many combinations of put contracts are currently trading “out-of-the-money?”
1) Derivative markets differ from stock and bond markets in that: A. derivative products are a...
1) Derivative markets differ from stock and bond markets in that: A. derivative products are a zero sum game B. derivatives are not issued by the company that the contracts relate to C. both A and B D. none of the above 2) An investor buys a Call option on a stock for $5. The strike price is $40 per share. On the expiry date the market price of the stock is $42 per share. A. The investor has made...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT