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. I

Q: Assume you buy 20 put options  at a price of $5 each. The stock is currently priced at $46 and the…

A: option index call or put give owner right to purchase or sell on mentioned date but no obligation…

Q: A) What is the price of a $30 strike put? Assume S = $28.50, σ = 0.32, r = 0.04, the stock pays a…

A: S = $28.50 σ = 0.32 r = 0.04 Dividend= 1.0% Option expiry period= 110 days Price of a $30 strike…

Q: u have taken a long position in a call option on IBM common stock. The option has an exercise price…

A: The premium on an option is made up of intrinsic and extrinsic value. Intrinsic value is the…

Q: les price of a call option on a stock which does not pay dividends and has the volatility 0.3, if…

A: The given problem relates to Black scholes model.

Q: ou have purchased a put option on ABC common stock for $3 per contract. The option has an exercise…

A: Profit on put is the difference between the exercise price of put option and closing price of put…

Q: Suppose you decided to enter into a futures contract involving a stock that sells for Php888.75 per…

A: Here, Stock Price per share is Php 888.75 Total no. of Shares is 1000 shares Initial Margin…

Q: What’s wrong here? Describe how you can take advantage of this mispricing if the option expires…

A: Information Provided: Share price = $50 Exercise price = $35 Call price = $10

Q: A trader buys a call option on a share for K2. The stock price is K25 and the strike price is K20.…

A: Call option gives the holder the right but not the obligation to buy at the strike price. A call…

Q: A one-year call option on a stock with strike price of $90 costs $6 and a one-year put option on the…

A: Call option is the one of financial instrument which gives right to holder but not an obligation to…

Q: A trader buys a European put on a share for K3. The stock price is K42 and the strike price is K40.…

A: Put options: Put options give the buyer the right, but not the obligation to sell the underlying…

Q: You purchase a call option on Stock A with an exercise price of $85 for a premium of $1.9. You hold…

A: A call option is right to purchase a stock at the strike price  when spot price is less than…

Q: A stock currently trades at 5100. In one month its price will either be $125, $100, or $75. I sell…

A: The option is the financial derivative that provides the right to buy or sell the underlying asset…

Q: Suppose an investor purchases a 3-month call option and a 3-month put option on ABC stock. The the…

A: The options gives the opportunity to buy or sell the stock on expiration by payment of premium but…

Q: You have purchased a put option on ABC common stock for $3 per contact. The option has an exercise…

A: Given: Put option value = $3 Exercise price = $57 Stock price = $45…

Q: A PUT and a CALL option are written on a stock with a strike price of $60. The options are held…

A: Strike Price = $60 Spot price = $75 Call premium = $16 Put Premium = $3

Q: Calculate (i) the cashflow today, (ii) the cashflow at maturity, and (iii) the net profit from your…

A: In this we have to calculate the cash flow at beginning and MATURITY and than find out profit.

Q: A PUT and a CALL option are written on a stock with a strike price of $60. The options are held…

A: Put option: This option gives the right to the holder to sell the assets at a specific price and…

Q: The market price of a stock is $35.00. An investor has purchased a call option for 100 shares of…

A: Price of underlying asset = $35 Exercise price = $20 Number of shares = 100 Intrinsic value of the…

Q: Suppose that both a call option and a put option have been written on a stock with an exercise price…

A: Calculate the profit on the short call option by adding the premium value (P) which is $3 from call…

Q: Suppose you purchase XYZ 100 shares of call option. Each option is with exercise price 124. Each…

A: Answer Call option shall exercise only if expiry price is higher then exercise price. If expiry or…

Q: Explain this step by step: Gerald purchased 3 put option contracts at an option premium of $0.95…

A: Given Information 3 Put option contracts are purchased Option premium = $0.95 1.)Strike Price = $40…

Q: Mr. A bought a put option of 6 months for a price of $50. The strike price is $150. At the end of 6…

A: Strike price is the price at which a stock can be bought or sold.

Q: Consider the following information on AAPL. The current stock price is $326.72. The call option has…

A:

Q: Suppose that a June call option to buy a share for $65 costs $3.5 and is held until June.  Under…

A: 1.the holder of a call option will make profit when the price of the share of will be greater than…

Q: Assume the possible stock prices of Hull Inc. are $150, $155, $160, $165, $170, $175, and $180. The…

A:

Q: The margin requirement on the S&P 500 futures contract is 16%, and the stock index is currently…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Consider the following: your purchased a put option on JPM two months ago, with a strike price for…

A: Put option Put option gives an investor the right to sell a stock but not an obligation to sell.…

Q: price is 200 USD and expiration in two year. Interest rate is zero and the price of the stock is 180…

A: The given problem relates to black scholes model.

Q: ■ Yegi’s Fine Phones has a current stock price of $30. You need to findthe value of a call option…

A: Options can be defined as-“A contract which gives the buyer the right, but not an obligation to buy…

Q: Suppose the price of a share of Google stock is $500. An April call option on Google stock has a…

A: Call Option:- Call option means right to buy in future at price decided at intianial date.

Q: Suppose Amazon’s stock is trading for $530 per share, and Amazon pays no dividends. What is the…

A: Strike price- it is a price at which the call option can be exercised.

Q: mpute the Black-Scholes price of a put option on a stock which does not pay dividends and has the…

A: The given problem relates to black Scholes Model.

Q: Profit on Option  You have purchased a call option contract on Dash common stock. The option has an…

A: Call option is a derivative contract that gives the buyer the right but not the obligation to buy…

Q: A PUT and a CALL option are written on a stock with a strike price of $60. The options are held…

A: Note: I am supposed to provide the solution to the question first only. Please repost the remaining…

Q: of the company's S10 par common stock at an option price of 530 per share. The market value of the…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: ean put option on a non-dividend paying stock with exercise price 100 USD and expiration time in one…

A: The given problem relates to bLack Scholes model.

Q: You have purchased a put option on ABC common stock for $2 per contract. The option has an exercise…

A: Put option gives the investor an option to sell the stock at a given exercise price. Put option…