nsider two put options on different stocks. The table below reports the relevant information for both options: Put optionTime to maturityCurrent price of underlying stockStrike priceVolatility ( )X1 year$27$1830%Y1 year$25$2030% All else equal, which put option has a lower premium? A.Put option Y B.Put option
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Consider two put options on different stocks. The table below reports the relevant information for both options:
Put optionTime to maturityCurrent price of underlying stockStrike priceVolatility ( )X1 year$27$1830%Y1 year$25$2030%
All else equal, which put option has a lower premium?
A.Put option Y B.Put option X
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- Label the following for this diagram: a. Name of options payoff b. Identify whether positive or negative premium c. Identify breakeven point d. What is the profit or loss when stock price is S60 at maturity e. Suppose you have this options position, should you exercise your right (if any) assuming that the stock price is $60 at maturity? Option Payoffs and Profits Long put $40 $20 $0 Option Payoff Option Profit Exerche Price $20 S40 $20 $40 S60 $80. Stock Price At Maturity Payoff and ProfitUse the Black-Scholes formula to find the value of a call option based on the following inputs. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Stock price Exercise price Interest rate Dividend yield Time to expiration Standard deviation of stock's returns Call value $ 51 $ 64 0.068 0.04 0.50 0.265Use the Black-Scholes formula to find the value of a call option based on the following inputs. (Round your final answer to 2 decimal places. Do not round intermediate calculations.) Stock price Exercise price Interest rate Dividend yield Time to expiration Standard deviation of stock's returns Call value GA $ $ $ 48 60 0.07 0.04 0.50 0.26
- 1. An option is trading at $5.26, has a delta of .52, and a gamma of .11. what would the delta of the option be if the underlying increases by $.75? What would the delta of the option be if the underlying decreases by $1.05? Explain.An option is trading at $3.45. If it has a delta of .78, what would the price of the option be if the underlying increases by $.75? A. What would the price of the option be if the underlying decreases by $.55? B. What makes this a call option? C. With a delta of .78, is this option ITM, ATM or OTM and how?Label the following for this diagram: a. Name of options payoff b. Identify whether positive or negative premium c. Identify break-even point d. What is the profit or loss when stock price is $60 at maturity e. Suppose you have this options position, should you exercise your right (if any) assuming that the stock price is $60 at maturity? Option Payoffs and Profits Long put $40 $20 $0 Option Payoff Option Profit ---- Exercise Price -$20 -$40 $0 $20 $40 $60 $80 Stock Price At Maturity Payoff and Profit
- Label the following for this diagram: a. Name of options payoff b. Identify whether positive or negative premium c. Identify break-even point d. What is the profitt or loss when stock price is $60 at maturity e. If you have this option position, should you exercise your right (if any) assuming that the stock price is $60 at maturity? Option Payoffs and Profits $40 $20 $0 Option Payoff Option Profit --- Exercise Price -$20 -$40 $0 $20 $40 $60 $80 Stock Price At Maturity Payoff and ProfitLabel the following for this diagram: a. Name of options payoff b. Identify whether positive or negative premium c. Identify break-even point d. What is the profitt or loss when stock price is $60 at maturity e. Suppose you have this options position, should you exercise your right (if any) assuming that the stock price is $60 at maturity? Option Payoffs and Profits $40 Long call $20 $0 Option Payoff Option Profit ---- Exercise Price -$20 -$40 $0 $20 $40 $60 $80 Payoff and ProfitA put option has a strike price of MYR3.00/SGD. If the option is exercised before maturity, what price in the followings would maximize gain? a. MYR3.00/SGD. b. MYR2.90/SGD. c. MYR3.05/SGD. d. MYR2.95/SGD.
- Finance (a) Consider a portfolio with a Delta of 100, a Gamma of -20, and a Vega of -10. There are two traded options available: Traded options 1 Traded options 2 Delta 0.2 -0.1 Gamma Vega 0.01 0.05 0.5 0.3 What position in the traded option and/or underlying stock would make the portfolio Gamma and Vega neutral? (Required: Show your work step by step)Assume the stock’s future prices of stock A and stock B as the following distribution State Future Price Stock A Future price Stock B 1 $10 $7 2 $8 $9 If the time 1 price of stock A is $6, and the time 1 price of stock B is $5. And C1 represents the time 1 price of claim on state 1, C2 represents the time 1 price of claim on state 2 Use the information about stock prices and payoffs to Find the time 1 price C1 and C2. Find the risk–free rate of return, obtained in this market.A stock with a current market price of $50 has an associated put option priced at $6.5. This put option has an exercise price of $48. The put option has an intrinsic value of ______ and a time value of ______. Select one: a. $0; $4.5 b. -$2; $8.5 c. $2; $4.5 d. $2; $6.5 e. $0; $6.5