Use the data in the figure 20.1 and calculate the payoff and the profits for investments in each of the following January expiration options, assuming that the stock price on the expiration date is $125.
Use the data in the figure 20.1 and calculate the payoff and the profits for investments in each of the following January expiration options, assuming that the stock price on the expiration date is $125.
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
Use the data in the figure 20.1 and calculate the
payoff and the profits for investments in each of
the following January expiration options, assuming
that the stock price on the expiration date is $125.
a. Call option, X=$120
b. Put option, X=$120
c. Call option, X=$125
d. Put option, X=$125
e. Call option, X=$130
f. Put option, X=$130
Transcribed Image Text:PRICES AT CLOSE
DECEMBER 02, 2009
IBM (IBM)
Underlying Stock Price: 127.21
Call
Put
Open
Volume Interest
Орen
Last Volume Interest
Expiration Strike
Last
644
1267
33
8806
8871
1903
34
Dec 2009
Jan 2010
Арг 2010
Jul 2010
Dec 2009
Jan 2010
Apr 2010
Jul 2010
Dec 2009
Jan 2010
Apr 2010
Jul 2010
Dec 2009
Jan 2010
Apr 2010
Jul 2010
120
120
120
120
125
125
125
125
130
130
130
130
7.75
8.63
11.25
13.30
3.25
4.75
7.90
10.05
0.77
2.18
5.49
7.75
0.11
197
130
43
34
416
278
69
2370
21884
1705
108
14419
14180
3652
150
11033
19278
2773
111
8955 7.65
0.26
1.18
4.20
6.70
1.02
2.44
6.05
8.85
3.55
4.79
8.50
11.30
1872
9203
1060
82
15
844
9094
1122
215
4233
2108
3489
29
31
214
176
126
198
3273
66
85
1312
228
86
631n
135
135
135
135
7.75
11.50
13.80
24
776
0.84
3.45
5.67
24556
3798
140
45
433
1 113
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