Turn back to Figure, which lists prices of various IBM options. Use the data in the figure
Question:
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.
PRICES AT CLOSE DECEMBER 02, 2009 I B M (IBM) Underlying Stock Price: 127.21 Put Open Expiration Strike Last Volume Inferest Lest Voiome Interest ec200 120 175 197 2370 026 644 8806 an 2010 120 863130 21884 18 127 887 2010 20 1125 43105 420 33 1903 34 c 2003 125 325 416 14419 02 1872 9203 n 2010 5 75 278 4180 44 060904 A 2010 1 TS0 3852 05 8 112 Jul2010 125 1005 7 150 แ5 15 215 Dec 2039 130 077 2108 11033 355 844 433 n 2010 130 18 489 27 479 198 3373 lp 2010 30549 29 2773 850 1312 13.30 34 104670 Dec200 135011 214 8955 765 8663 2010 125 084 176 24556 775 24 776 2010 135 45 12 38 15045 33 1 113 ld 2010 13 567 6 140 1380
Step by Step Answer:
Cost Payoff Profit a Call option X 12000 100001000010...View the full answer
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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