Previously, you purchased a European call option on Parlicoot Inc shares. The option has just matured. The strike price on the option is 93.93, while the current stock price is 58.34. What is your payoff? 0.00 1.61 35.59 -35.59
Previously, you purchased a European call option on Parlicoot Inc shares. The option has just matured. The strike price on the option is 93.93, while the current stock price is 58.34. What is your payoff? 0.00 1.61 35.59 -35.59
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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Question
Previously, you purchased a European call option on Parlicoot Inc shares. The option has just matured. The strike price on the option is 93.93, while the current stock price is 58.34. What is your payoff?
|
0.00 |
||
|
1.61 |
||
|
35.59 |
||
|
-35.59 |
Expert Solution
Step 1
Payoff on European call option on Parlicoot Inc shares is calculated using following equation
European call option payoff = Max(0,ST-K)
Where, ST is stock price at time T
K is strike price
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