An investor buys a put option at a premium of $4.6 with an exercise price of $30. At what stock price will the investor break even on the purchase of the put option?
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An investor buys a put option at a premium of $4.6 with an exercise price of $30. At what stock price will the investor break even on the purchase of the put option?
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- An investor buys a put option at a price of 24.15 dollars with an exercise price of $190.00 at what stock price will be invested break even on the purchase of the put?An investor buys a put option with an exercise price of $40 when the stock price is $42. The option premium is $1. At expiration the stock price is $37. The investor will realize____________. A. a loss of $2. B. a loss of $3. C. a profit of $1. D. a profit of $2.You have written a call option on Walmart common stock. The option has an exercise price of $81, and Walmart’s stock currently trades at $79. The option premium is $1.60 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit if Walmart’s stock price decreases to $77 and stays there until the option expires? c. What is your net profit on the option if Walmart’s stock price increases to $87 at expiration of the option and the option holder exercises the option?
- An investor makes the following three investments: (i) the purchase of a stock for £38(ii) the purchase of a put option for £0.50 with a strike price of £35 and (iii) the sale ofa call option (ie. writing a call option) for £0.50 with a strike price of £40 .(a)What is the intrinsic value and the time value of the put option, What is the maximum profit and loss for this position?A call option on the stock of Bedrock Boulders has a market price of $7.The stock sells for $30 a share, and the option has a strike price of $25 ashare. What is the exercise value of the call option? What is the option’stime value?An investor makes the following three investments: (i) the purchase of a stock for £38(ii) the purchase of a put option for £0.50 with a strike price of £35 and (iii) the sale ofa call option (ie. writing a call option) for £0.50 with a strike price of £40 .(a) What is the intrinsic value and the time value of the put option and what is the maximum profit and loss for this position?
- A one-year call option on a stock with strike price of $90 costs $6 and a one-year put option on the same stock with strike price of $90 costs $7. Suppose that a trader buys one call option and one put option. a. What is the breakeven stock price, above which the trader makes a profit? b. What is the breakeven stock price, below which the trader makes a profit?A call option on Rosenstein Corporation stock has a market price of $7. Thestock sells for $31 a share, and the option has an exercise price of $25 a share.a. What is the exercise value of the call option?b. What is the premium on the option?An investor purchases a call option at a premium of $1.25, with an exercise price of $7.50 within three months.The holder of the option will: A) B) C) D) * A. be in-the-money if the market price of the shares reaches $6.25 B. only exercise the option if the current market price reaches or exceeds $8.75 C. exercise the option at any price above $7.50. D. break even at a market price of $7.50, and will exercise the option
- You buy a put option on IBM common stock. The option has an exercise price of $136 and IBM’s stock currently trades at $140. The option premium is $5 per contract.a. What is your net profit on the option if IBM’s stock price increases to $150 at expiration of the option and you exercise the option? b. How much of the option premium is due to intrinsic value versus time value?c. What is your net profit if IBM’s stock price decreases to $130?d. Draw the payout diagram at maturity on a short put option position, option premium = $2, and the same exercise price... (Please give the full solution I will upvote)An investor buys a call at a premium of $4.4 with an exercise price of $40. At what stock price will the investor break even on the purchase of the call?A stock price is $30. An investor buys one call option contract on the stock with a strike price of $28 and sells a call option contract on the stock with a strike price of $27. The market prices of the options are $2 and $1.7, respectively. The options have the same maturity date. Describe the investor’s position and the possible gain/loss he will get (taking into account the initial investment). Make a graph of your gain/loss.