Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Related questions
Question
Assume you purchased the right to sell 2,000 shares of Target stock in February 2022 at a strike price of $240 per share. Suppose Target stock sells for $212 per share immediately before your options’ expiration. What is the
Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-month returns as a percent rounded to 2 decimal places.
Transcribed Image Text:TGT US Equity 95) Actions 96) Export. 97) Settings.
TARGET CORP
-5.845
216.12 Strikes
Center
Calc Mode
ID Center Strike
Calls/Puts 83 Calls
1215.875
5 Exp 21-Jan-22
DTGT 1/21/22 C210
2) TGT 1/21/22 C212.5
Ticker
Bid
21-Jan-22 (0d); CSize 100; R .26; IFwd 216.06
5.80
3.65
1.77
56
15
3) TGT 1/21/22 C215
4 TGT 1/21/22 C217.5
5) TGT 1/21/22 C220
10 Puts
Calls
10.00
4.60
1.76
.62
Ask
7.40
6.10
2.28
.89
.26
-2.6362%
Exch US Composite
As of
19 Term Structure
21.60
13.80
8.65
5.15
2.95
18-Feb-22 (28d); CSize 100; IDiv .78 USD; R .26; IFwd 215.32
TGT 2/18/22 C200
17.55
20.00
7) TGT 2/18/22 C210
10.25
4.90
TGT 2/18/22 C220
TGT 2/18/22 C230
100 TGT 2/18/22 C240
1.96
.73
Last
21-Jan-2022
7.35
6.65y
2.10
80
21
28.50y
10.80
18-Mar-22 (56d); CSize 100; IDiv .78 USD; R.26; IFwd 215.36
10) TGT 3/18/22 C200
20.15
12 TGT 3/18/22 C210
13.45
13) TGT 3/18/22 C220
8.35
14 TGT 3/18/22 C230
4.85
15) TGT 3/18/22 C240
2.70
5.15
1.98
72
215.82/215.99
29.00y
14.25
9.65
5.10
2.85
Moneyness
IVM
118.18
130.35
66.42
64.54
60.19
37.18
29,19
27.75
27.49
28.22
35.07
32.58
31.34
31.07
31.08
Volm
Hi 220.34
92) 03/02/22 E | ERN >>
Strike
Lo 215.76
Ticker
Bid
21-Jan-22 (0d); CSize 100; R .26; IFwd 216.06
4210.00 50 TGT 1/21/22 P210
.18
.44
212.50 52 TGT 1/21/22 P212.5
5215.00 530 TGT 1/21/22 P215
77217.50 50 TGT 1/21/22 P217.5
62 220.00 55) TGT 1/21/22 P220
5-
Puts
.89
1.96
3.90
Volm 717042
Ask
31
.59
1.22
2.46
4.55
2.20
4.75
9.55
16.90
25.95
Last
18-Feb-22 (28d); CSize 100; IDiv .78 USD; R .26; IFwd 215.32
200.00 56 TGT 2/18/22 P200
10 210.00 57) TGT 2/18/22 P210
2.10
4.45
9.15
62 220.00 58 TGT 2/18/22 P220
79 230.00 59 TGT 2/18/22 P230
102 240.00 600) TGT 2/18/22 P240
.30
.50
1.00
2.30
4.00
5.15
8.50
13.45
19.80
27.80
2.10
4.60
9.40
16.30
23.85
18-Mar-22 (56d); CSize 100; IDiv .78 USD; R.26; IFwd 215.36
200.00 61) TGT 3/18/22 P200
16 210.006) TGT 3/18/22 P210
5.00
8.30
12.85
20 220.00 63) TGT 3/18/22 P220
35 230.00 60 TGT 3/18/22 P230
19.15
16 240.00 65) TGT 3/18/22 P240
26.05
16.37
23.78
4.95
8.35
12.55
18.49
25.83
Option Monitor
HV 25.09
IVM
87.48
77.91
63.96
60.30
56.40
32.04
29.45
27.52
27.01
16.79
34.16
32.35
31.34
30.06
28.44
Volm
58
36
202
86
149
44
462
34
28
20
18
38
6
9
5
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps with 2 images
Knowledge Booster
Similar questions
- Assume that you have shorted a call option on Intuit stock with a strike price of $40. The option will expire in exactly three months' time. a. If the stock is trading at $55 in three months, what will you owe? b. If the stock is trading at $35 in three months, what will you owe? c. Draw a payoff diagram showing the amount you owe at expiration as a function of the stock price at expiration. a. If the stock is trading at $55 in three months, what will you owe? If the stock is trading at $55 in three months, you will owe $ (Round to the nearest dollar.)arrow_forwardThe price of Newgen Corp. stock will be either $94 or $103 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 7.90%. (Do not leave any empty spaces; input a O wherever it is required. Omit "$" sign in your response.) a. Suppose the current price of Newgen stock is $104. What is the value of the call option if the exercise price is $94 per share? (Round the final answer to 2 decimal places.) Call option value b. Suppose the exercise price is $109 in part (a). What is the value of the call option now? Call option valuearrow_forwardSuppose you think AppX stock is going to appreciate substantially in value in the next year. Say the stock's current price, Sø. is $75, and a call option expiring in one year has an exercise price, X, of $75 and is selling at a price, C, of $21. With $21,000 to invest, you are considering three alternatives. a. Invest all $21,000 in the stock, buying 280 shares. b. Invest all $21,000 in 1,000 options (10 contracts). c. Buy 100 options (one contract) for $2,100, and invest the remaining $18,900 in a money market fund paying 6% in interest over 6 months (12% per year). What is your rate of return for each alternative for the following four stock prices in 6 months? (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Round the "Percentage return of your portfolio (Bills + 100 options)" answers to 2 decimal places.) The total value of your portfolio in six months for each of the following stock prices is: Stock Price All…arrow_forward
- Assume that the current stock price is $50 per share, that call options can be purchased with an exercise price of $60 per share, that bank loans can be obtained for a 10 percent nominal rate, and that at expiration of the option in three months, the stock will either be valued at $30 or $70. Show that it is possible to replicate the stock payoff by borrowing and buying a call option.arrow_forwardThe current price of a non-dividend paying stock is $50. Use a two-step tree to value a European put option on the stock with a strike price of $50 that expires in 12 months. Each step is 6 months, the risk free rate is 5% per annum, and the volatility is 50%. What is the value of the option according to the two-step binomial model. Please enter your answer rounded to two decimal places (and no dollar sign).arrow_forwardSuppose that you, on 1st of January 2023, enter a long position in a 10-year forward contract on a non-dividend-paying stock. The stock price is $50 and the risk-free rate of interest is 5% per annum with yearly compounding (as per 1st of January 2023). Five years later, 1st of January 2028, the price of the stock is $60 and the risk-free interest is still 5%. b) On 1st of January 2028, what are the forward price and the value of the forward contract that you entered into on 1st of January 2023? Explain. c) Suppose that you on 1st of January 2028 enter a short position in a forward contract on the same underlying stock and with expiration date in 5 years. What is the value of your total position? (I.e. what is the total value of the long position in the forward contract in a) and your short position). What is the payoff of your total position at maturity? d) On 1st of January 2028, what is the value to the party holding the short position in the contract entered into on 1st of…arrow_forward
- The current stock price of Chocho inc is $125. You expect the stock price a year from now to be either $134 or $86 with equal probabilities. The interest rate at which investors can borrow is 13%. Using the binomial opm, what should be the price (premium) of a call option with an exercise price of $115.00 and an expiration date one year from now?arrow_forwardYou sell a call option on Tesla stock with an exercise price of $150.00. The option expires after one month period as soon as the option premium is $12.00. what is the profit on this option is the stock price $180 at expiration?arrow_forwardThe current price of Natasha Corporation stock is $6.00. In each of the next two years, this stock price can either go up by $2.50 or go down by $2.00. The stock pays no dividends. The one-year risk-free interest rate is 3.0% and will remain constant. Using the Binomial Model, calculate the price of a two-year call option on Natasha stock with a strike price of $7.00. The price of the two-year call option is $ (Round to the nearest cent.)arrow_forward
- The stock price of Copious Corp. is currently $30. The stock price 1 year(s) from now will be either $34 or $27. The annual risk-free rate is 1.4%. Using the binomial model, what is the value of a call option with an exercise price of $30 and an expiration date 1 year(s) from now?arrow_forwardConsider a forward contract which allows you to buy/sell a non-dividend paying stock in three months. Assume the current stock price is $99.41 and the three-month risk free interest is 5.4 percent per year. What should be the forward price? Keep your answer to two decimal places.arrow_forwardThe current price of a stock is $21. In 1 year, the price will be either $26 or $16. The annual risk-free rate is 5%. Find the price of a call option on the stock that has a strike price of $22 and that expires in 1 year. (Hint: Use daily compounding.) Assume a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education