Question
1.On the day before Facebook released its quarterly report, investor A bought 100 shares of the Facebook stock at the price of $200 per share,
1.On the day before Facebook released its quarterly report, investor A bought 100 shares of the Facebook stock at the price of $200 per share, and sold 100 European call options on the stock expiring in two days. The strike price of the option was $200 per share and the option premium was $5 per share. Two days later, the stock was trading at $190 per share. What was the profit earned by this investor over these two days?
a. $ -500. b. $-200. c.$ -1000. d.$ 500.
2.On the day before Facebook released its first quarterly report, investor B bought 1000 European call options on the Facebook stock with strike price of $200 per share, and bought 1000 European put options on the stock with a strike price $200 per share. Both options had a time to maturity of two days. The premium for the first option was $5 per share, and the premium for the second option was $4.9 per share. Two days later, the stock was trading at $190 per share. What was the profit earned by this investor over these two days?
a. $ -100. b. $ 100 c. $ 510. d. $ -990.
3.On the day before Facebook released its first quarterly report, investor C bought 100 European call options on the Facebook stock with strike price of $190 per share, and sold 100 European call options on the stock with a strike price $210 per share. Both options had a time to maturity of two days. The premium for the first option was $15 per share, and the premium for the second option was $4.5 per share. Two days later, the stock was trading at $190 per share. What was the profit earned by this investor over these two days?
a. $ -1500. b. $ 450. c. $ - 1050. d.$ -1950.
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