Q) A put option on MaysCo stock is available with an exercise price of $110 and a premium of $2 per share.   What is the net gain (per share) on the option if the price of MaysCo stock if the price of the stock falls to $104? Show your work. what is the gain per option as a percentage of the premium

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter3: Benefits, Costs, And Decisions
Section: Chapter Questions
Problem 3.4IP
icon
Related questions
Question

Q) A put option on MaysCo stock is available with an exercise price of $110 and a premium of $2 per share.   What is the net gain (per share) on the option if the price of MaysCo stock if the price of the stock falls to $104? Show your work.

what is the gain per option as a percentage of the premium?

i only need second answer plz don't waste my question by answering first one... correct answer will be rated

Solve this finance

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Clean Air Act
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics: Applications, Strategies an…
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning