One month ago you purchased a put option on the S&P500 Index with an exercise price of $910.00. Today is the expiration date, and the index is at $900.96. a. Will you exercise the option? Yes b. What will be your profit? (Enter "O" if there is no profit or return from not exercising the option. Round your answer to 2 decimal places.) Profit $
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- One month ago you purchased a put option on the S&P500 Index with an exercise price of $900.00. Today is the expiration date, and the index is at $896.46. a. Will you exercise the option? b. What will be your profit?An investor has a long call option on the market index at a strike price of $930.At expiration the index price is $920. Explain the profit and loss.You would like to be holding a protective put position on the stock of XYZ Company to lock in a guaranteed minimum value of $210 at year-end. XYZ currently sells for $210. Over the next year, the stock price will either increase by 10% or decrease by 10%. The T-bill rate is 4%. Unfortunately, no put options are traded on XYZ Company. Required: a. How much would it cost to purchase if the desired put option were traded? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What would be the cost of the protective put portfolio?
- Consider the following: your purchased a put option on JPM two months ago, with a strike price for the option of $138, and the option expires today. Suppose the stock price is $152. What is the exercise value?You would like to be holding a protective put position on the stock of XYZ Company to lock in a guaranteed minimum value of $105 at year-end. XYZ currently sells for $105. Over the next year, the stock price will increase by 9% or decrease by 9%. The T-bill rate is 7%. Unfortunately, no put options are traded on XYZ Company. Required: Suppose the desired put option were traded. How much would it cost to purchase? What would have been the cost of the protective put portfolio? What portfolio position in stock and T-bills will ensure you a payoff equal to the payoff that would be provided by a protective put with X = 105? Show that the payoff to this portfolio and the cost of establishing the portfolio match those of the desired protective put.Suppose that you purchased a call option on the S&P 100 Index. The option has an exercise price of 1,680, and the index is now at 1,720. What will happen when you exercise the option?
- Assume you buy a March RM1625 FBM-KLCI call option for RM25 and hold until expiry. What will be your maximum loss in ringgit? Assume you buy a March RM1625 FBM-KLCI call option for RM25 and hold until expiry. At what index level will you break-even? Assume you buy a March 1625 points FBM-KLCI call option for RM25 and hold until expiry. Draw an expiry profit diagram for this option.You have taken a long position in a call option on IBM common stock. The option has an exercise price of $176 and IBM’s stock currently trades at $180. The option premium is $5 per contract. What is your net profit on the option if IBM’s stock price increases to $190 at expiration of the option and you exercise the option? What is your net profit if IBM’s stock price decreases to $170?Consider a put option whose underlying asset is a stock index with 6 months to expiration and a strike price of $1000. Suppose the risk-free interest rate for the six months is 2% and that the option’s premium is $74.20. (a) Find the future premium value in six months. (b) What is the buyer’s profit is the index spot price is $1100? (c) What is the buyer’s profit is the index spot price is $900 Only typed answer
- You shorted a call option on Intuit stock with a strike price of $38. When you sold (wrote) the option, you received $3. The option will expire in exactly three months' time. a. If the stock is trading at $49 in three months, what will your payoff be? What will your profit be? b. If the stock is trading at $35 in three months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the payoff at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits. Question content area bottom Part 1 a. The payoff of the short is $ short is $ enter your response here. enter your response here, and the profit of the. Please step by step answer.You would like to be holding a protective put position on the stock of XYZ Company to lock in a guaranteed minimum value of $240 at year-end. XYZ currently sells for $240. Over the next year, the stock price will either increase by 7% or decrease by 7%. The T-bill rate is 3%. Unfortunately, no put options are traded on XYZ Company. Required: a. How much would it cost to purchase if the desired put option were traded? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What would be the cost of the protective put portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)One of the options is Delta Airlines. They have paid an annual divendend of $3.98 for the past 25 years and we expect them to continue this indefinetly. Assuming the market requires a(n) 12.0% return Delta, what is the value of a share of stock? (Answer with 2 decimals.) And what if we assumed they would start increasing their divendend by 2.5% per year? What would be a fair price in that scenario? (Answer with 2 decimals.)
