Question
1) If we want to calculate our gains or losses when buying a call, which of the following formulas do we use? A. (Strike price
1) If we want to calculate our gains or losses when buying a call, which of the following formulas do we use?
A. | (Strike price * 100) - (Stock price * 100) - (call premium * 100) | |
B. | (Stock price * 100) - (Strike price * 100) - (call premium * 100) | |
C. | (Stock price * 100) - (Strike price * 100) + (call premium * 100) | |
D. | (Strike price * 100) - (Stock price * 100) + (call premium * 100) |
2) If we want to calculate our gains or losses when buying a put, which of the following formulas do we use?
A. | (Strike price * 100) - (Stock price * 100) - (call premium * 100) | |
B. | (Stock price * 100) - (Strike price * 100) - (call premium * 100) | |
C. | (Stock price * 100) - (Strike price * 100) + (call premium * 100) | |
D. | (Strike price * 100) - (Stock price * 100) + (call premium * 100) |
3)
If we want to calculate our gains or losses when writing a put, which of the following formulas would we use if the buyer chose not to exercise the option?
A. | (Strike price * 100) - (Stock price * 100) - (call premium * 100) | |
B. | (Stock price * 100) - (Strike price * 100) - (call premium * 100) | |
C. | (Stock price * 100) - (Strike price * 100) + (call premium * 100) | |
D. | (Strike price * 100) - (Stock price * 100) + (call premium * 100) | |
E. | None of the above |
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