Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

18. XYZ stock is currently trading at a market price (S) of $50. You do not own the stock, but you are long a put

image text in transcribed
18. XYZ stock is currently trading at a market price (S) of $50. You do not own the stock, but you are long a put option on 1 share with a strike price (X) of $43. The cost put (premium) was \$2. What are the option's Intrinsic and Time Values? * [i) (5 Points) Intrinsic Value =$0 Time Value =$2 Intrinsic Value =$1 Time Value =$1 Intrinsic Value =$2 Time Value =$0 19. XYZ stock is currently trading at a market price (S) of $50. You do not own the stock, but you are long a put option on 1 share with a strike price (X) of $43. The cost put (premium) was $2. What is the profit or loss of the strategy the stock's price is $33 on the expiration date? * (5 Points) $2 Loss $2 Gain $4 Profit $8 Profit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Handbook Of Experimental Finance

Authors: Sascha Füllbrunn, Ernan Haruvy

1st Edition

1800372329, 978-1800372320

More Books

Students also viewed these Finance questions