Required: a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. Note: Enter "0" if there is no profit or return from not exercising the option. Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places. b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. Required: a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. Note: Enter "O" if there is no profit or return from not exercising the option. Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places. Company Option Strike Today's Stock Price In/Out of the Money? Premium Exercise? Profit Return ABC Call 10 $ 10.26 0.90 % ABC Put 10 $ 10.26 0.75 % ABC Call 25 $ 23.93 0.85 % ABC Put 25 $ 23.93 2.05 % b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. Company Option Strike Today's Stock Price In/Out of the Money? Premium Exercise? Profit Return ABC Call 10.00 $ 11.23 0.90 % ABC Put 10.00 $ 11.23 0.75 % ABC Call 25.00 $ 27.00 0.85 % ABC Put 25.00 $ 27.00 2.05 %
Required: a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. Note: Enter "0" if there is no profit or return from not exercising the option. Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places. b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. Required: a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. Note: Enter "O" if there is no profit or return from not exercising the option. Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places. Company Option Strike Today's Stock Price In/Out of the Money? Premium Exercise? Profit Return ABC Call 10 $ 10.26 0.90 % ABC Put 10 $ 10.26 0.75 % ABC Call 25 $ 23.93 0.85 % ABC Put 25 $ 23.93 2.05 % b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. Company Option Strike Today's Stock Price In/Out of the Money? Premium Exercise? Profit Return ABC Call 10.00 $ 11.23 0.90 % ABC Put 10.00 $ 11.23 0.75 % ABC Call 25.00 $ 27.00 0.85 % ABC Put 25.00 $ 27.00 2.05 %
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
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Transcribed Image Text:Required: a. You have just purchased the options listed below. Based on the information given, indicate whether the
option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring
today, what the dollar profit would be, and what the percentage return would be. Note: Enter "0" if there is no profit or
return from not exercising the option. Negative amounts should be indicated by a minus sign. Round your answer to 2
decimal places. b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table
below. Recalculate your answers to part a.
Required:
a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out
of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and
what the percentage return would be.
Note: Enter "O" if there is no profit or return from not exercising the option. Negative amounts should be indicated by a minus
sign. Round your answer to 2 decimal places.
Company Option Strike
Today's Stock
Price
In/Out of the Money?
Premium
Exercise?
Profit
Return
ABC
Call
10 $
10.26
0.90
%
ABC
Put
10 $
10.26
0.75
%
ABC
Call
25
$
23.93
0.85
%
ABC
Put
25
$
23.93
2.05
%
b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers
to part a.
Company
Option
Strike
Today's Stock
Price
In/Out of the Money? Premium Exercise?
Profit
Return
ABC
Call
10.00 $
11.23
0.90
%
ABC
Put
10.00 $
11.23
0.75
%
ABC
Call
25.00 $
27.00
0.85
%
ABC
Put
25.00 $
27.00
2.05
%
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