Question

1. A call option with a strike price of $35 on ABC stock expires today. The current price of ABC stock is $30. The call is:

2. A put option with a strike price of $35 on ABC stock expires today. The current price of ABC stock is $30. The put is:

a. at the money

b. out of the money

c. in the money

d. none of the above

Answer #1

This is known as Moneyness of an option . This relates to current stock price w.r.t strike price

**Where S is the Stock Price and E is the Strike
Price**

1. The Correct answer is **Out of the money**

Strike Price = $35

Stock Price = $30

As S < E the call is Out of the money.

2. The Correct answer is **In the
money**

Strike Price = $35

Stock Price = $30

As S < E the put is In of the money.

Question 1:
A put option on DEF stock with a strike price of $10 expires
today. The current price of TYU stock is $13.14. The put's
intrinsic value is ___ and it is ____.
A) $3.14, out of the money
B) $3.14, in the money
C) $3.14, at the money
D) $0, out of the money
E) $0, in the money
Question 2:
A call option on GHI stock with a strike price of $17.50
expires today. The current price...

A put option with a strike price of $90 sells for $6.3. The
option expires in four months, and the current stock price is
$92.3. If the risk-free interest rate is 4.3 percent, what is the
price of a call option with the same strike price? (Round your
answer to 2 decimal places. Omit the "$" sign in your response.)
Price of a call option $

A one-year call option has a strike price of 60, expires in 6
months, and has a price of $2.5. If the risk-free rate is 7
percent, and the current stock price is $55, what should the
corresponding put be worth?
a. $5.00
b. $7.54
c. $7.08
d. $5.50

5.7. The price of a European call that expires in six months and
has a strike price of $30 is $2. The underlying stock price is $29,
and a dividend of $0.50 is expected in two months and again in five
months. Risk-free interest rates (all maturities) are 10%. What is
the price of a European put option that expires in six months and
has a strike price of $30?

1) When a share of a company's stock is selling for $55.00, a
call option on the stock with a strike price of $56.00 is said to
be:
A) In the Money
B) Out of the Money
C) Carried at basis
D) An American option
2) When a share of a company's stock is selling for $55.00, a
put option on the stock with a strike price of $56.00 is said to
be:
A) In the money
B) Out of...

The price of a European call on a stock that expires in one year
and has a strike of $60 is $6. The price of a European put option
on the same stock that also expires in one year and has the same
strike of $60 is $4. The stock does not pay any dividend and the
one- year risk-free rate of interest is 5%. Derive the stock price
today. Show your work.

The price of a European call on a stock that expires in one year
and has a strike of $60 is $6. The price of a European put option
on the same stock that also expires in one year and has the same
strike of $60 is $4. The stock does not pay any dividend and the
oneyear risk-free rate of interest is 5%. Derive the stock price
today. Show your work.

The price of a European call that expires in six months and has
a strike price of $28 is $2. The underlying stock price is $28, and
a dividend of $1 is expected in 4 months. The term structure is
flat, with all risk-free interest rates being 6%. If the price of a
European put option with the same maturity and strike price is $3,
what will be the arbitrage profit at the maturity?

Suppose that you are holding a European call option on General
Motors stock that expires in 5 years. The option is currently
at-the-money. GM's current stock price is $42.50 and the current
yield on a 5-year Treasury bond is 2%. The standard deviation of
returns on GM stock is 25%. For the purposes of this series of
questions, you should assume that GM does not pay dividends.
You may assume that all of the information above applies.
What is the...

Joe Brown purchased a call
option on Cisco stock with a strike price of $40 for a
premium of $2 per share.
1) Before the option expires, Cisco stock price is $44. Will Joe
strike or not? What would be his profit/loss? What is the return
rate on his investment on the option trading
(ignore the money used in purchasing stocks)? Is this not strike?
since X>S, and call option
2) Assume instead, the price of Cisco stock is $39....

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 9 minutes ago

asked 15 minutes ago

asked 17 minutes ago

asked 18 minutes ago

asked 21 minutes ago

asked 25 minutes ago

asked 28 minutes ago

asked 35 minutes ago

asked 46 minutes ago

asked 46 minutes ago

asked 46 minutes ago