Consider the following options on the same stock. They all expire the same day. Based on what you see, rank the options in order of strike, from highest to lowest. CALL PRICE $7.35 $1.25 $.52 $3.25 OPTION A OPTION B OPTION C OPTION D PUT PRICE $.10 $1.52 $2.80 $.48
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- Of the following four call options that can be purchased on a stock, which would you expect to have the lowest price? A. September call; $85 exercise price B. September call; $80 exercise price C. December call; $85 exercise price D. December call; $80 exercise priceAssume a stock with an option with the information as follows. • Stock purchased price was $113.• Call option on the stock was purchased at $4. • Call option has strike price at $115.• the stock price is $117on expiration date Please explain the Call Options Payoff Diagrams below, why it plot like this (please explain step by step) . Thank you for your answeringTurn back to Figure 20.1 , which lists prices of various IBM options. Use the data in the figure tocalculate the payoff and the profits for investments in each of the following January expirationoptions, assuming that the stock price on the expiration date is $125.a. Call option, X 5 $120.b. Put option, X 5 $120.c. Call option, X 5 $125.d. Put option, X 5 $125.e. Call option, X 5 $130.f. Put option, X 5 $130.
- Required: Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following December 2019 expiration options on a single share, assuming that the stock price on the expiration date is $137. (Loss amounts should be indicated by a minus sign. Round "Profit/Loss" to 2 decimal places.) a. Call option, X = 135 b. Put option, X = 135 es c. Call option, X = 145 d. Put option, X = 145 Payoff Profit/LossAn investor owns Citibank stock at $75. They want to sell some 3-month out- of-the-money call options against their position. STRIKES 72.50 75 77.50 CALL PRICE 5.60 4.12 2.84 Create a table showing the profit and loss for underlying trading at 70, 72.5, 75, 77.5, 80 and 82.5 for all the positions and the option strategy. Draw an expiry pay-off diagram, using the prices in the table.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.
- The following table lists prices of Amazon options in January 2018 when Amazon stock was selling for $1,400. Expiration Date April 2018. July 2018 January 2019 Exercise Price $1,200 1,300 1,400 $1,200 1,300 1,400 $1,200 1,300 1,400 Call Price Put Price $132.70 $31.10 73.20 70.10 33.00 134.20 $53.55 $161.70 104.00 62.55 $210.00 155.35 112.00 96.00 156.05 $88.05 133.25 190.00 Suppose that by January 2019, the price of Amazon could either rise from its January 2018 level to $1,400 × 1.20 = $1,680.00 or fall to $1,400/1.20 $1,166.67. a. Percentage return b. Percentage return C. Which is riskier: the stock or the option? a. What would be your percentage return on a January expiration call option with an exercise price of $1,400 if the stock price rose? (Round your answer to 2 decimal places.) b. What would be your percentage return if the stock price fell? (Negative value should be indicated by a minus sign.) c. Which is riskier: the stock or the option? % %Use the data in the figure 20.1 and calculate thepayoff and the profits for investments in each ofthe following January expiration options, assumingthat the stock price on the expiration date is $125.a. Call option, X=$120b. Put option, X=$120c. Call option, X=$125d. Put option, X=$125e. Call option, X=$130f. Put option, X=$130Dawnguard Hotel Group Current Stock Price $75.00 Required: Using the data above, please calculate the intrinsic and time values for each of the following options: (Use cells A3 to B3 and B11 to C14 from the given information to complete this question.) Exercise Price Option Price Intrinsic Value Time Value Call Option $70.00 $8.75 Call Option $80.00 $2.45 Put Option $70.00 $3.84 Put Option $80.00 $9.84
- Use the following quotes for Target stock options: Calls Last 29.00y 14.25 9.65 5.10 2.85 Ticker TGT 3/18/22 C200 TGT 3/18/22 C210 TGT 3/18/22 C220 TGT 3/18/22 C230 TGT 3/18/22 C240 Ticker TGT 3/18/22 P200 TGT 3/18/22 P210 TGT 3/18/22 P220 TGT 3/18/22 P230 TGT 3/18/22 P240 Source: Bloomberg Finance L.P. Total cost Bid 20.15 13.45 $ 8.35 4.85 2.70 Bid 5.00 8.30 12.85 19.15 26.05 Ask 21.60 13.80 8.65 5.15 2.95 249 Ask 5.15 8.50 13.45 19.80 27.80 Puts Last 4.95 8.35 12.55 18.49 25.83 IVM Volume 35.07 32.58 31.34 31.07 31.08 IVM 34.16 32.35 31.34 30.06 28.44 16 20 35 16 If you wanted to purchase the right to sell 3,000 shares of Target stock in March 2022 at a strike price of $210 per share, how much would this cost you? Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Volume 18 38 6 9 5suppose that you have a call option that is at 1.30. it has a Delta of .35 a Gamma of .06 a Theta of .02 assume Vega is constant. today the stock moves from $45 to $46. the next day (day 2) the stock moves another dollar to $47. What is the value of your call option at the end of day two A. $2.02 B. $1.69 C. $1.73 D. $1.982. Consider a particular stock with call and put options. The date is January 12, and the price of the stock is P185. The table below shows the closing prices of four options, two of which expire in February and May and have exercise prices of 175 and 205, respectively. The February options will expire on February 16th, while the May options will expire on October 20th. These specific selections are of the American style. Exercise Price February Calls May Calls February Puts 18.00 May Puts 175 25.00 33.50 26.75 205 18.20 20.22 25.25 32.18 A. Consider the February call. Explain (with supporting calculations) that the option holder has no reason the option right now. When is the purchased justified? B. Explain (with supporting calculations) that, given February call at an exercise price is less likely also to be exercised. C. Suppose that the option buyer has an alternative to purchase May| call instead of February call. Explain why May options are more likely to be exercised than…