A put option on MSFT (Microsoft) stock has the following terms: exercise/ strike price is $320; expiration date is December 30, 2022; the option premium is $20. The investor holds this option until the expiration date. On the expiration date, MSFT share price is $310. The investor made a on this option. Assume each option contract is for 1 Microsoft share. Oprofit of $30 Oloss of $10 loss of $20 profit of $20
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- a) Tembo holds a one-year put option on Shoprite common stock. The put option canbe exercised at K50. Assume that the expiration date has arrived and the premium isK3. What is the value of the Shoprite put option on the expiration date if:Shoprite common stock is selling at K56 per share?IBM stock is currently trading at $100 per share. An investor purchases one Put option contra on IBM with a $100 strike and at a price of $3.00 per contract. Each options contract represer an interest in 100 underlying shares of stock. For each of the following scenarios determine i 7. the option is in the money, at the money, or out of the money. Show your work. A. When the option expires, IBM is trading at $98 B. When the option expires, IBM is trading at $90 C. When the option expires, IBM is trading at $97Tembo holds a one-year put option on Shoprite common stock. The put option can be exercised at K50. Assume that the expiration date has arrived and the premium is K3. What is the value of the Shoprite put option on the expiration date if: Shoprite common stock is selling at K56 per share? Shoprite common stock is selling at K45 per share?
- Assume that you buy a single stock futures (SSF) of ABC Company with total initial margin of $2,000 in April 2020 to hedge the optential risk. The settlement price on the purchasing day was $4.00. The initial margin of each SSF is $200 while the contract size of the SSF is 1,000 shares of ABC Company. In May 2020, you have close-up the position when the settlement price increases to $4.50. During the period, the balance of your account was below the maintenance margin twice and you were asked to top up $2,000. Identify the return on the invested capital for the futures investment. **The answer provided is 125%. Please provide the steps.Assume that you buy a single stock futures (SSF) of ABC Company with total initial margin of $2,000 in April 2020 to hedge the optential risk. The settlement price on the purchasing day was $4.00. The initial margin of each SSF is $200 while the contract size of the SSF is 1,000 shares of ABC Company. In May 2020, you have close-up the position when the settlement price increases to $4.50. During the period, the balance of your account was below the maintenance margin twice and you were asked to top up $2,000. Identify the return on the invested capital for the futures investment.On July 1, 2020 an investor holds 50,000 shares of a certaincompany stock. The market price at this time is $30 per share. (a) what is the current value of investor’s portfolio Value_________ The investor is interested in hedging against movements in the market over the next months (until Sep 2020) and decides to use the September 2020 Mini S&P 500 futures contract. The index futures price is currently 1,500 and one contract is for delivery of $50 times the index. (b) What is the current value of one Mini S&P 500futures contract? Value___________ (c) The beta of the stock is 1.3. How can investor hedge his portfolio against market risk exposure by trading S&P 500 market index Trading strategy______ (d) The beta of the stock is 1.3. How can investor hedge his portfolio against market risk exposure using futures contract. Should he/she enter LONG or SHORT position. For how many futures contracts? SHORT or LONG (circle) N contracts________ (e)…
- Assume a 40 July put option is purchased for GH¢6.50 on a stock selling at GH¢35 per share.If the stock ends up on expiration at GH¢38.75, what will be the value of the put option?Please finish parts d-f On July 1, 2020 an investor holds 50,000 shares of a certaincompany stock. The market price at this time is $30 per share. (a) what is the current value of investor’s portfolio Value_________ The investor is interested in hedging against movements in the market over the next months (until Sep 2020) and decides to use the September 2020 Mini S&P 500 futures contract. The index futures price is currently 1,500 and one contract is for delivery of $50 times the index. (b) What is the current value of one Mini S&P 500futures contract? Value___________ (c) The beta of the stock is 1.3. How can investor hedge his portfolio against market risk exposure by trading S&P 500 market index Trading strategy______ (d) The beta of the stock is 1.3. How can investor hedge his portfolio against market risk exposure using futures contract. Should he/she enter LONG or SHORT position. For how many futures contracts? SHORT or LONG (circle) N…The stock of Bedrock Solutions is currently trading at $24.50 per share. The 1-month put option with strike price of 13.50 is currently selling for $2.16. What's the intrinsic value of this put option?
- Misuraca Enterprise’s current stock price is $45 per share. Call optionsfor this stock exist that permit the holder to purchase one share at an exercise price of $50.These options will expire at the end of 1 year, at which time Misuraca’s stock will be sellingat one of two prices, $35 or $55. The risk-free rate is 5.5%. As an assistant to the firm’streasurer, you have been asked to perform the following tasks to arrive at the value of thefirm’s call options.a. Find the range of values for the ending stock price and the call option at the option’sexpiration in 1 year.b. Equalize the range of payoffs for the stock and the option.c. Create a riskless hedged investment. What is the value of the portfolio in 1 year?d. What is the cost of the stock in the riskless portfolio?e. What is the present value of the riskless portfolio?f. From your answers in parts d and e, what is the value of the firm’s call option?Please finish this problem from part e on: On July 1, 2020 an investor holds 50,000 shares of a certain company stock. The market price at this time is $30 per share. A) what is the current value of investor’s portfolio Value_________ The investor is interested in hedging against movements in the market over the next months (until Sep 2020) and decides to use the September 2020 Mini S&P 500 futures contract. The index futures price is currently 1,500[1] and one contract is for delivery of $50 times the index. B) What is the current value of one Mini S&P 500 futures contract? Value___________ C) The beta of the stock is 1.3. How can investor hedge his portfolio against market risk exposure by trading S&P 500 market index Trading strategy _____ D) The beta of the stock is 1.3. How can investor hedge his portfolio against market risk exposure using futures contract. Should he/she enter LONG or SHORT position. For how many futures contracts? SHORT or…Ms. Co currently own a put option on Stock A with a strike price of P45. If the current price of Stock A is P40, then what is the in-the-money amount of the option?