a) Tembo 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: i. Shoprite common stock is selling at K56 per share? II. Shoprite common stock is selling at K45 per share?
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a) Tembo 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?
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- A put option with an exercise price of P90 was priced at P4. At expiration, the underlying stock is selling for P95.50. If you wrote this put for P4, your profit or loss at expiration would be at what amount? please need it asap uhuYou purchase 8 put option contracts on HSB Industries. The strike price was $45 and the option premium was $1.47. On the expiration date, the stock was valued at $49.09 a share. What is your payoff on the option contracts? Answer should be formatted as a number with 2 decimal places (e.g. 99.99).Q1. You have purchased a call option on Johnson & Johnson common stock. The option has an exercise price of $57.50 and J & J’s stock currently trades at $58.93. The option premium is $2.17 per contract. Calculate your net profit on the option if J & J’s stock price rises to $62.50 and your exercise the option. Calculate your net profit on the option if J & J’s stock price falls to $58.00 and your exercise the option. If J & J’s stock price falls to $58.00 show that it is more profitable to exercise than not exercise the option you have purchased.
- Y7 For three 6-month American call options on a stock, you are given the following information: (i) One with strike price 45 sells for 6.30. (ii) One with strike price 44 sells for 7.00. (iii) One with strike price 40 sells for 9.50. The option with strike 44 is overpriced based on the convexity property of option premiums. You therefore sell it and purchase x 40-strike calls and y 45-strike calls (note that we do not necessarily need to have x + y = 1). Determine the maximal and the minimal values of x and y in order to create an arbitrageIBM 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 $97The cost of a call option on HSB stock with a strike price of $45 is $1.08. The option has 2 months until expiration. You purchase 6 contracts. On the expiration date, the stock was valued at $49.29 a share. What is your profit or loss on the option contracts? Answer should be formatted as a number with 2 decimal places (e.g. 99.99).
- The company offered its investors option contracts to buy their shares at P72 with the current price of P90. They were only given 90 days to exercise their rights. 52 week-high for the stock is P95 while the 52-week low is P70. The T-bill rate is 7.32%. REQUIRED: Value of Nd1. (Use 4 decimal places) Value of Nd2. (Use 4 decimal places) Volatility rate. (Use percentage and at least, two decimal places) Value of the call option. (Use two decimal places) Value of the put options. (Use two decimal places)1. Assume you buy a March RM1625 FBM-KLCI call option for RM25 and hold until expiry. What will be your maximum loss in ringgit? 2. Suppose you bought stock XYZ December RM8 put options for 40 sen. What is the premium?TJMaxx (TJX) stock is currently selling for $796.96. You are thinking about buying it and you hope to sell it for $1141.71 in 4 years. What is the implied return? Round to 2 decimal places. Include a dollar sign ($) or percent (%) as appropriate.
- Tembo 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?The company offered its investors option contracts to buy their shares at P72 with the current price of P90. They were only given 90 days to exercise their rights. 52 week-high for the stock is P95 while the 52-week low is P70. The T-bill rate is 7.32%. REQUIRED: Value of Nd1. (Use 4 decimal places) ANS: 0.9991 Value of Nd2. (Use 4 decimal places) ANS: 0.9990 Volatility rate. (Use percentage and at least, two decimal places) ANS: 15.78% Value of the call option. (Use two decimal places) Value of the put options. (Use two decimal places)3. Consider a European put option on a non-dividend paying stock with exercise price 100 USD and expiration in one month. Interest rate is 1 percent and volatility of the stock is 0.4. Stock price 90 USD. Option price?? Use excel.