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9 Problem 2-26 (Algo) 9.09 points Refer to the stock options on Microsoft in the Figure 2.10. Suppose you buy a November expiration call
9 Problem 2-26 (Algo) 9.09 points Refer to the stock options on Microsoft in the Figure 2.10. Suppose you buy a November expiration call option on 100 shares with the excise price of $135. Required: a-1. If the stock price at option expiration is $142, will you exercise your call? eBook Print Yes No References a-2. What is the net profit/loss on your position? (Input the amount as a positive value.) of a-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return % b-1. Would you exercise the call if you had bought the November call with the exercise price $130? Yes No b-2. What is the net profit/loss on your position? (Input the amount as a positive value.) of b-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return % c-1. What if you had bought the November put with exercise price $135 instead? Would you exercise the put at a stock price of $135? Yes No c-2. What is the rate of return on your position? (Negative value should be indicated by a minus sign.) Rate of return % Problem 2-29 (Algo) Both a call and a put currently are traded on stock XYZ; both have strike prices of $41 and expirations of six months. Required: a. What will be the profit/loss to an investor who buys the call for $4.40 in the following scenarios for stock prices in six months? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Stock Price Profit/Loss $ 31 $ 36 41 $ $ 46 51 b. What will be the profit/loss in each scenario to an investor who buys the put for $7.90? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Stock Price Profit/Loss $ 31 $ 36 $ 41 $ 46 51
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