You purchase on 50% margin, 150 shares of a stock with the following quotes:BidAsk$24.00$22The maintenance margin set by your broker is 30%.Use this information to answer the question below.Let us say that the information above remains true, except that the security price changes as follows: Bid: $16, and Ask: $17.To satisfy the margin call, you could deposit an additionalin cash:O 12084O 264O None of the above

The maintenance margin refers to the minimum amount of money that should be kept in the account as…

Answered: You purchase on 50% margin, 150 shares…

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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Similar questions

answer c please
You buy a share of stock, write a one-year call option with X = $26, and buy a one-year put option with X = $26. Your net outlay to establish the entire portfolio is $24.60. What is the payoff of your portfolio? What must be the risk-free interest rate? The stock pays no dividends. (Do not round intermediate calculations. Round "risk-free rate" to 2 decimal places.)
PLEASE GIVE ME THE CORRECT ANSWER
In follow an Ito process with >0, a stock is worth $80 today, if the price of an option that pays the holder $2 exactly the first time the stock price reaches $200, what is the price of an option? Show all calculation.
Explain well all point of question with proper answer.
You would like to be holding a protective put position on the stock of XYZ Company to lock in a guaranteed minimum value of $240 at year-end. XYZ currently sells for $240. Over the next year, the stock price will either increase by 7% or decrease by 7%. The T-bill rate is 3%. Unfortunately, no put options are traded on XYZ Company. Required: a. How much would it cost to purchase if the desired put option were traded? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What would be the cost of the protective put portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
I need only part D
3) Can you please answer the question in the photo?
Finance Suppose that you are writing 5 call contracts on TGT with a strike price of $157.50. The premium is $2.50 per share. Answer the following: (1) Will this option be exercised if the stock price at expiration is $159.25? And more importantly, why (or WHY NOT?) Note: in practicing written communication, your brief answer should be in complete sentences in plain English such that an “average Joe” can follow your line of thought. (2) Calculate your TOTAL profit (loss) if TGT stock price at expiration is $159.25 per share.
The stock price of BAC is currently $150 and a put option with strike price of $150 is $10. A trader goes long 300 shares of BAC stock and long 3 contracts of the put options with strike price of $150. a. What is the maximum potential loss for the trader?[x](sample answer: $105.75)b. When the stock price is $161 on the expiration, what is the trader’s net profit?[y](sample answer: $105.75)
You would like to be holding a protective put position on the stock of XYZ Company to lock in a guaranteed minimum value of $210 at year-end. XYZ currently sells for $210. Over the next year, the stock price will either increase by 10% or decrease by 10%. The T-bill rate is 4%. Unfortunately, no put options are traded on XYZ Company. Required: a. How much would it cost to purchase if the desired put option were traded? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost to purchase b. What would be the cost of the protective put portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost of the protective put portfolio
You have written a call option on Walmart common stock. The option has an exercise price of $81, and Walmart’s stock currently trades at $79. The option premium is $1.60 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit if Walmart’s stock price decreases to $77 and stays there until the option expires? c. What is your net profit on the option if Walmart’s stock price increases to $87 at expiration of the option and the option holder exercises the option?

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