You write a put with a strike price of $110 on stock that you have shorted at $110 (this is a "covered put"). What are the expiration date profits to this position for stock prices of $100, $105, $110, $115, and $120 if the put premium is $3.50? Note: A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places. Stock price $ $ $ $ $ 100.00 105.00 110.00 115.00 120.00 Short profit Put payoff Put profit Net profit

You write a put with a strike price of $110 on stock that you have shorted at $110 (this is a "covered put"). What are the expiration date profits to this position for stock prices of $100, $105, $110, $115, and $120 if the put premium is $3.50? Note: A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places. Stock price $ $ $ $ $ 100.00 105.00 110.00 115.00 120.00 Short profit Put payoff Put profit Net profit

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

If you place a stop-loss order to sell at $52 on a stock currently selling for$55.50 per share, what is likely to be the minimum loss you willexperience on 100 shares if the stock price rapidly declines to $49.50 pershare? Explain. What if you had placed a stop-limit order to sell at $52,and the stock price tumbled to $49.50?
A put is the option to sell stock at $54. It expires after three months and currently sells for $2 when the price of the stock is $55. If an investor buys this put, what will the profit be after three months if the price of the stock is $60? $54? $48? Round your answers to the nearest dollar. Use a minus sign to enter loss values, if any. If the answer is zero, enter "0". Price of the stock Profit on the position in the put $60 $ $54 $ $48 $ What will be the profit from selling this put after three months if the price of the stock is $60? $54? $48? Round your answers to the nearest dollar. Use a minus sign to enter loss values, if any. If the answer is zero, enter "0". Price of the stock Profit on the position in the put $60 $ $54 $ $48 $
A stock has a required return of 11%, the risk-free rate is 3.5%, and the market risk premium is 5%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 8%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places. If the stock's beta is equal to 1.0, then the change in required rate of return will be less than the change in the market risk premium. If the stock's beta is greater than 1.0, then the change in required rate of return will be greater than the change in the market risk premium. If the stock's beta is less than 1.0, then the change in required rate of return will be greater than the change in the market risk premium. If the stock's beta is greater than 1.0, then the change in required rate of return will be less than the change in the market risk premium. If the stock's…
You are given the following information concerning the trades made on a particular stock. Calculate the money flow for the stock based on these trades. (Leave no cells blank - be certain to enter "0" wherever required. A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Price Volume $ 59.97 59.99 3,400 59.97 2,900 59.96 3,300 58.97 3,450 60.20 4,200 60.11 4,500
A PUT and a CALL option are written on a stock with a strikeprice of $60. The options are held until expiration Suppose the stock price at expiration is $75. Call premium is $16. The CALL option WRITER’S profit would be:a) -$3b) $3c) -$15d) $15e) None of the above
Suppose that both a call option and a put option have been written on a stock with an exerciseprice of $40. The current stock price is $42, and the call and put premiums are $3 and $0.75,respectively. Calculate the profit to positions of both the short call and the long put with an expiration day stock price of $43.
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two for one in the last period. P0 Q0 P1 Q1 P2 Q2 A 100 625 105 625 105 625 B 65 650 60 650 60 650 C 70 150 90 150 45 300 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Calculate the new divisor for the price-weighted index in year 2. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Calculate the rate of return for the second period (t = 1 to t = 2).
Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 and expirations of 6 months.a. What will be the profit to an investor who buys the call for $4.8 in the following scenarios for stock prices in 6 months? (i) $40; (ii) $45; (iii) $50; (iv) $55; (v) $60. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Round your answers to 1 decimal place.) stock price profit i. $40 ii. $45 iii. $50 iv. $55 v. $60 b. What will be the profit to an investor who buys the put for $7.5 in the following scenarios for stock prices in 6 months? (i) $40; (ii) $45; (iii) $50; (iv) $55; (v) $60. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Round your answers to 1 decimal place.) stock price profit i. $40 ii. $45 iii. $50 iv. $55 v. $60
A stock has a required return of 10%, the risk-free rate is 3.5%, and the market risk premium is 3%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 6%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places. 3. Stock's required rate of return will be %.
Calculate the SUE for a stock with actual quarterly earnings of $0.50 per share andexpected quarterly earnings of $0.30 per share. The standard error of estimate is 0.05.Is this a good buy?
Consider the following limit order book for FinTrade stock. The last trade in the stock occurred at a price of $50. Limit Buy Orders Limit Sell Orders Price Shares Price Shares $ 49.75 500 $ 49.80 100 49.70 900 49.85 100 49.65 700 49.90 300 49.60 400 49.95 100 48.65 600 Required:a. If a market buy order for 100 shares comes in, at what price will it be filled? (Round your answer to 2 decimal places.) b. At what price would the following market buy order be filled? (Round your answer to 2 decimal places.) c. If you were a security dealer, would you want to increase or decrease your inventory of this stock?
A PUT and a CALL option are written on a stock with a strikeprice of $60. The options are held until expiration. Suppose the stock price at expiration is $75. Put premium is $3. The PUT option WRITER’S profit would be:a) -$3b) $3c) -$15d) $15e) None of the above

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS