You own a put option on Ford stock with a strike price of $9. When you bought the put, its cost to you was $2. The option will expire in exactly six months' time. b. If the stock is trading at $23 in six months, what will be the payoff of the put? What will be the profit of the put? c. Draw a payoff diagram showing the value of the put 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 put is $ (Round to the nearest dollar.) ,and the profit of the put is $
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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 }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. 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 price of a stock is $58, and a six-month call with a strike price of $55 sells for $5. 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 falls, what happens to the price of the call? As the price of the stock falls, the value of the call . If the price of the stock falls to $50, 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 covered? $ If, at the expiration of the call, the price of the stock is $65, 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 $65, what is the profit (or loss) from selling the call covered? Enter your answer as a positive value. The from selling the call covered is $ . If, at the expiration of the…
- A six-month call is the right to buy stock at $19. Currently, the stock is selling for $22, and the call is selling for $6. You buy 100 shares ($2,200) and sell one call (in other words, you receive $600). Does this position illustrate covered or naked call writing? This position illustrates a call. If, at the expiration date of the call, the price of the stock is $32, what is your profit on the combined position? Round your answer to the nearest dollar. $ per 100 shares If, at the expiration date of the call, the price of the stock is $18, what is your profit on the combined position? Round your answer to the nearest dollar. $ per 100 sharesTreeOlivia'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?Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 and expirations of 6 months. What will be the profit to an investor who buys the call for $4 in the following scenarios for stock prices in 6 months? What will be the profit in each scenario to an investor who buys the put for $6? $40 $45 $50 $55 $60
- 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.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?Suppose that currently, stock BVC is trading at $100 per share. A put option with a strike price of $120 that expires in one year is selling at $11.12. What is the profit to a trader who buys this put option, assuming that in one year the stock price of BVC is $125