Assume a 40 July put option is purchased for 6.50 on a stock selling at $35 per

Question:

Assume a 40 July put option is purchased for 6.50 on a stock selling at $35 per share. If the stock ends up on expiration at 38.75, what will be the value of the put option?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Investment Management

ISBN: 978-0078034626

10th edition

Authors: Geoffrey Hirt, Stanley Block

See More Books

Question Posted: Sep 21, 2015 05:36 AM

See More Questions

Look at the option quotes in Table 142 on page 368. a. What is the closing price of the common stock of SINGLE Systems? b. What is the highest strike price listed? c. What is the price of a December...
Assume on May 1 you are considering a stock with three different expiration dates for the 60 call options. The percentage of the speculative premium for each date is as follows: May....... 2.8%...
Indicate some factors that might influence the price of wheat in the commodities market.
If the molecular weight of air is 28.9, what is the density of air at atmospheric pressure and a temperature of 328.2 K? 1 atm = 1.013 x 10 5 N/m, the mass of a proton is 1.67262 x 10 -27 kg,...
Allentown Services Inc. is preparing adjusting entries for the year ending December 31, 2011. The following data are available: a. Interest is owed at December 31, 2011, on a six-month, 8 percent...
Describe the insuring agreements of liability insurance contracts generally and explain the insurers obligation to defend the insured
A work center consists of 4 machines each working a 16-hour day for 5 days a week. What is the weekly available time? LO.1
Monitoring of Receivables The Russ Fogler Company, a small manufacturer of cordless telephones, began operations on January 1. Its credit sales for the first 6 months of operations were a follows:...
4. Calculations. Points as indicated. You must show your work to receive credit for your answer. It is in your best interest to show your work as partial credit may be awarded. c. Culbreath Company...
You own 1,000 shares of stock in Avondale Corporation. You will receive a $3.45 per share dividend in one year. In two years, the company will pay a liquidating dividend of $62 per share. The...
In problem 10, what would be the overall gain or loss if the stock ended up at a. $41 b. $25 c. $57 d. $70 [Disregard the stock being called away in parts a, c, and d. Assume you will repurchase the...
Assume a stock is selling for $66.75 with options available at 60, 65, and 70 strike prices. The 65 call option price is at $4.50. a. What is the intrinsic value of the 65 call? b. Is the 65 call in...
Identify two categories of working paper files and differentiate the contents of each.
For the past 30 years, the average satisfaction rating for a sushi restaurant has been 3.9 out of 5. If the rating for a sample of 256 people is 4.1 with a standard deviation of 0.5, the critical...
Hash collisions occur when more than one item is mapped to the same element in Hash Table's array. What is one way that a Hash Table can handle collisions?
Scatterplot. In Exercises 5-8, use the sample data to construct a scatterplot. Use the first variable for the x-axis. Based on the scatterplot, what do you conclude about a linear correlation? Pulse...
Given two fair six sided dice and a standard deck of 52 playing cards, calculate the probability of a rolling a sum of 7 or 11 and drawing three cards in which at least one is a face card.
z Scores. In Exercises 5-8, express all z scores with two decimal places. 5. Diastolic Blood Pressure of Females For the diastolic blood pressure measurements of females listed in Data Set 1 "Body...
Refer to the information in QS 13-4. Use that information for Tide Corporation to determine the 2016 and 2017 common-size percents for cost of goods sold using net sales as the base. Data From QS...
The Place-Plus real estate development firm in Problem 24 is dissatisfied with the economists estimate of the probabilities of future interest rate movement, so it is considering having a financial...
Miraclean Corp. produces an industrial cleaning compound which is sold nationally at a price of $\$ 10$ per one gallon container. The marketing division is subdivided into sales regions each headed...
Assume that you are a financial analyst for a large investment banking firm. You are responsible for analyzing companies in the retail sales industry. You have just learned that a large West Coast...
Distinguish between significant influence and control, and describe how these concepts relate to the method of accounting for intercorporate investments.
Dividends received or receivable from another company are a revenue in calculating net income, a return of investment, or eliminated, depending on the method of accounting the investor uses. Explain.
Current Attempt in Progress On July 3 1 , 2 0 2 2 , Crane Compary had a cash balance per books of $ 6 , 2 4 5 . 0 0 . The statement from Dakata State Bark on that date showed a balance of $ 7 , 7 9 5...
Cede & Co. expects its EBIT to be $89,000 every year forever. The firm can borrow at 5 percent. Cede currently has no debt, and its cost of equity is 10 percent. If the tax rate is 35 percent, what...
In the Marriott example, one discussion point considered when a firm might use a single hurtle rather than different divisional or business unit rates. When a single rate is used and the divisions...

Assume a 40 July put option is purchased for 6.50 on a stock selling at $35 per

Question:

Step by Step Answer:

Strike price sell...View the full answer

Fundamentals of Investment Management

Related Video

Students also viewed these Corporate Finance questions