A 8-month call option contract on 100 shares of Home Depot common stock with a strike price of $50.05 can be purchased for $512 Assuming that the market price of Home Depot stock rises to $65 11 per share by the expiration date of the option, what is the call holder's profit? What is the holding period return? GILS The profit this option would generate over the 8-month holding period is S (Round to the nearest cent.)

A 8-month call option contract on 100 shares of Home Depot common stock with a strike price of $50.05 can be purchased for $512 Assuming that the market price of Home Depot stock rises to $65 11 per share by the expiration date of the option, what is the call holder's profit? What is the holding period return? GILS The profit this option would generate over the 8-month holding period is S (Round to the nearest cent.)

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

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← A 6-month call option contract on 100 shares of Home Depot common stock with a strike price of $50.15 can be purchased for $510. Assuming that the market price of Home Depot stock rises to $65.56 per share by the expiration date of the option, what is the call holder's profit? What is the holding period return? The profit this option would generate over the 6-month holding period is $1131. (Round to the nearest cent.)
An investor sells 10 call options with an exercise price of $35 for a price of $5.00 per each contract. If on the expiration day the underlying asset is trading at $43 per share, what is investor’s gain or loss? $50 gain $30 gain $20 loss $30 loss
You purchase one put option contract on AMD with an exercise price of $100 for a premium of $3.7. You hold the option until the expiration date, when AMD sells for $108 per share. One contract is on 100 shares of the underlying stock. Compute your profit. Your Answer: Answer
A 9-month put option on SMC's stock has a strike price of P50 and sells in the market for P9.50. SMC's current stock price is P43. What is the option premium?
You buy one, Jan 15, 2021 Alphabet Inc. (GOOG) put contract with strike price of $680 and pay a premium of $7. The put contract represents 100 shares of stock. What is the maximum net profit that you could gain from this strategy (be sure to include the cost of the option contract in your calculation)?
A put option written on the stock of Taylor Enterprises (TE) hasan exercise price of $25 and 6 months remaining until expiration.The risk-free rate is 6%. A call option written on TE has the sameexercise price and expiration date as the put option. TE’s stock priceis $35. If the call option has a price of $12.05, then what is the price(i.e., value) of the put option? ($1.31)
A 6-month call option on Meyers Inc.'s stock has a strike price of $45.00 and sells in the market for $8.25. Meyers' current stock price is $51.25. What is the option premium?
A one year call option contract of Office Pro sells for $2,200. In one year, the stock price will be either $20 or $30. The exercise price on the call option is $15. What is the current value of the option if the risk-free rate is 8 percent? A.$ 3.48 B.$ 2.78 C.$ 8.11 D.It is impossible to determine with the given information.
The cost of a call option on HSB stock with a strike price of $45 is $1.08. The option has 2 months until expiration. You purchase 6 contracts. On the expiration date, the stock was valued at $49.29 a share. What is your profit or loss on the option contracts? Answer should be formatted as a number with 2 decimal places (e.g. 99.99).
You purchase one put option contract on AMD with an exercise price of $70 for a premium of $2.4. You hold the option until the expiration date, when AMD sells for $78 per share. One contract is on 100 shares of the underlying stock. Compute your profit.
A 6-month put option on Smith Corp.'s stock has a strike price of $43.50 and sells in the market for $8.90. Smith's current stock price is $41. What is the option premium?
Assuming that a September put option to buy a share for $100 costs $4.50 and is held until September. Under what circumstances will the holder of this option make a profit? Under what circumstances will the option be exercised? Draw a diagram showing how the profit on a long position in the option depends on the stock price at the maturity of the option.

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