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solve all four from a to d
![You shorted a call option on Intuit stock with a strike price of $30. 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 $36 in three months, what will your payoff be? What will your profit be?
b. If the stock is trading at $23 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.
a. The payoff of the short is $], and the profit of the short is $
(Round to the nearest dollar.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa95626c2-c90a-44bc-a423-ee585171f854%2Fac133314-3a7a-4877-8f7d-bd58603147d5%2Fhris945_processed.png&w=3840&q=75)
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- 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.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 }You own a call option on Intuit stock with a strike price of $40. The option will expire in exactly three months’ time. If the stock is trading at $55 in three months, what will be the payoff of the call? Note: practice drawing the payoff diagram. Assume that you have shorted the call option in Question 2. If the stock is trading at $55 in three months, what will you owe? Note: practice drawing the payoff diagram. (ONLY ANSWER THIS QUESTION)
- Assume you own a call option on Yahoo stock with a strike price of $40. The option will expire in exactly three months time. If the stock is trading at $55 in three months time, what will be the payoff of the call?The stock of Suncor Energy is currently trading for $36 per share. An investor expects the stock price to move up in the next two months, and decided to invest $7, 200 in this stock. If the investor invests all the money in the stock, how much is the profit or loss if the stock price in two months turns out to be i) 40 or ii) 32? If the investor invests all the money in call options with a strike price of $35 and price of the call is $2 per share, how much is the profit or loss if the stock price in two months turns out to be i) 40 or ii) 32?The price of a stock is $34, and a six-month call with a strike price of $30 sells for $6. Round your answers to the nearest dollar. What is the option's intrinsic value? $ What is the option's time premium? $ If the price of the stock rises, what happens to the price of the call? As the price of the stock rises, the value of the call . If the price of the stock falls to $31, what is the maximum you could lose from buying the call? Enter your answer as a positive value. $ What is the maximum profit you could earn by selling the call uncovered (naked)? $ If, at the expiration of the call, the price of the stock is $30, what is the profit (or loss) from buying the call? Enter your answer as a positive value. The from buying the call is $ . If, at the expiration of the call, the price of the stock is $30, what is the profit (or loss) from selling the call naked? Enter your answer as a positive value. The from selling the call naked is $ . If, at the expiration of…
- You own a call option on Intuit stock with a strike price of $40. The option will expire in exactly three months time. If the stock is trading at $55 in three months, what will be the payoff of the call? Note: practice drawing the payoff diagram.The common stock of the CGI Inc. has been trading in a narrow range around $35 per share for months, and you believe it is going to stay in that range for the next three months. The price of a three-month put option with an exercise price of $35 is $2, and a call with the same expiration date and exercise price sells for $3. Suppose you write a strap ( = write 2 calls and write 1 put with the same strike price) and the stock price winds up to be $37 at contract expiration. What was your net profit on the strap? A. $200 B. $300 C. $400 D. $500 E. $700You purchase 36 call options on Greshak Corp. to increase returns on your equity portfolio. The three month calls specify the strike price is $48.00 and require a premium of $3.25. If Greshak's stock is trading at $52.00 at the time the options expire, what are your options worth? What was your net profit (in dollars and as an annualized percentage)? What would your profit in dollars and as an annualized percentage had been if the stock instead sold for $51.00/share at expiration? How about $50.00/share?
- TreeOlivia's stock price is $180 and could halve or double in each six-month period. The interest rate is 12% a year. What is the value of a six-month call option on TreeOlivia with an exercise price of $120? What is the option delta for the six-month call with an exercise of $120? The payoffs of the six-month call option can be replicated by buying shares of stock and borrowing. What amount should be invested in stock and what amount must be borrowed? Assume the exercise price is $120. What is the value of the one-year call option on TreeOlivia with an exercise of $150? (Hint: use the two-step binominal tree) What is the value of the one-year put option on TreeOlivia with an exercise of $150?The common stock of the C.A.L.L. Corporation has been trading in a narrow range around $50per share for months, and you believe it is going to stay in that range for the next 3 months. Theprice of a 3-month put option with an exercise price of $50 is $4.a. If the risk-free interest rate is 10% per year, what must be the price of a 3-month call optionon C.A.L.L. stock at an exercise price of $50 if it is at the money? (The stock pays nodividends.)b. What would be a simple options strategy using a put and a call to exploit your convictionabout the stock price’s future movement? What is the most money you can make on thisposition? How far can the stock price move in either direction before you lose money?c. How can you create a position involving a put, a call, and riskless lending that would havethe same payoff structure as the stock at expiration? What is the net cost of establishing thatposition now?A collar is established by buying a share of stock for $50, buying a 6-month put option with exercise price $45, and writing a 6-month call option with exercise price $55. On the basis of the volatility of the stock, you calculate that for a strike price of $45 and expiration of 6 months, N(d1) = .60, whereas for the exercise price of $55, N(d1) = .35.a. What will be the gain or loss on the collar if the stock price increases by $1?b. What happens to the delta of the portfolio if the stock price becomes very large?c. What happens to the delta of the portfolio if the stock price becomes very small?