Assume you own a call option on IBM stock with a strike price of $40. The option will expire in exactly six months time. If the stock is trading at $35 in six months, what will be the payoff of the call? Options for above is { $0.00 , $10,00 , $15.00 , $75.00 , $95.00 } Assume that you have shorted the call option described above, if the stock is trading at $55 in six months, what will you owe? Options for above is { $0.00 , $10.00 , $15.00 , $75.00 , $95.00 } If the stock is trading at $50 in six months, what will be the payoff of the call? Options for above is { $0.00 , $10.00 , $15.00 , $75.00 , $95.00 }
Assume you own a call option on IBM stock with a strike price of $40. The option will expire in exactly six months time. If the stock is trading at $35 in six months, what will be the payoff of the call? Options for above is { $0.00 , $10,00 , $15.00 , $75.00 , $95.00 } Assume that you have shorted the call option described above, if the stock is trading at $55 in six months, what will you owe? Options for above is { $0.00 , $10.00 , $15.00 , $75.00 , $95.00 } If the stock is trading at $50 in six months, what will be the payoff of the call? Options for above is { $0.00 , $10.00 , $15.00 , $75.00 , $95.00 }
Chapter20: Financing With Derivatives
Section20.A: The Black-scholes Option Pricing Model
Problem 1P
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Assume you own a call option on IBM stock with a strike price of $40. The option will expire in exactly six months time.
If the stock is trading at $35 in six months, what will be the payoff of the call? |
Assume that you have shorted the call option described above, if the stock is trading at $55 in six months, what will you owe?
Options for above is { $0.00 , $10.00 , $15.00 , $75.00 , $95.00 }
If the stock is trading at $50 in six months, what will be the payoff of the call?
Options for above is { $0.00 , $10.00 , $15.00 , $75.00 , $95.00 }
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