Question

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 of GHI stock is $23.95. The call's
intrinsic value is ___ and it is ____.

A) $6.45, at the money

B) $6.45 out of the money

C) $0, in the money

D) $6.45, in the money

E) $0, out of the money

Answer #1

Intrinsic value is the difference between strike price and stock price it will never be negative

1) Put option intrinsic value = Exercise price - stock price = $10 - $ 13.14 = -$3.14 = 0 ( that is zero)

option D) 0, out of the money . when option is not advantagous to exercise it is called out of the money

2) Call option intrinsic value = Stock price - exercise price = $ 23.95- $17.50 = $ 6.45

Option D) 6.45, in the money . In the money means option is advantagoues to exercise by the holder

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

6. A call option with a strike price of $30 expires in six
months. The current price of the stock is $40. What is the
intrinsic value of the option? Should the option have a time
premium? Is the option in-the-money or out-of-the-money?
I need help with this questions.

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 put option with a strike of $20 sells for $0.79. The
underlying stock price is 21.92. What is the intrinsic value of
this option?
Answer: 0 because it is out of the money. Please confirm

A Put option with a strike price of $60 on a stock
trading at $50 and expiring in one month’s time:
A. has zero time value
B. has zero intrinsic value
C. would trade for $10 in the options
market
D. is in-the-money

A put option with a strike of $100 expires in 3 months. The
underlying stock follows a binomial process and does not pay
dividends. Today, the stock price is $110, and in three months its
price will be $125 or $90. The annual Risk free rate is 6%.
calculate the fair price of the put option.
4.55, 3.51, 3.77, 4.02, OR 4.28.

If you purchase put options on €100 million with a
strike price of $1.1150/€, what is the intrinsic value of the
option contracts if the Euro is currently at
$1.1325/€?
a)0 – the option is at the money
b)0 – the option is in the money
c)0 – the option is out of the money
d)$1,750,000
e)$17,500,000

For a European option, if the stock price on the expiration day
is higher than the strike price, we call it
A.
“in the money” if it is a put option
B.
“at the money” if it is a call option
C.
“at the money” if it is a put option
D.
“out of the money” if it is a put option
E.
“out of the money” if it is 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

Consider a put option and a call option with the same strike
price and time to maturity. Which of the following is true? (5
points)
It is possible for both options to be in the money.
It is possible for both options to be out of the money.
One of the options must be in the money.
One of the options must be either in the money or at the
money.
When the stock price increases with all else remaining...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 15 minutes ago

asked 24 minutes ago

asked 46 minutes ago

asked 55 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago