a) How much must you pay for that option (which is based on 100 shares)? b)...

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a) How much must you pay for that option (which is based on 100 shares)? b) (8) Assume IBM stock today is at $79.15 per share, and a "January 70 put" is priced at $2.60. If IBM is $80 when the put expires in July, how much will it be worth? How much did you win or lose? c) Would a "January 75 put" cost more or less? d) Would an "March 70" put cost more or less? e) For the "January 70 Put", assume that IBM is at $64 per share at expiration. What is the option worth? What is your overall profit or loss including your purchase price? a) How much must you pay for that option (which is based on 100 shares)? b) (8) Assume IBM stock today is at $79.15 per share, and a "January 70 put" is priced at $2.60. If IBM is $80 when the put expires in July, how much will it be worth? How much did you win or lose? c) Would a "January 75 put" cost more or less? d) Would an "March 70" put cost more or less? e) For the "January 70 Put", assume that IBM is at $64 per share at expiration. What is the option worth? What is your overall profit or loss including your purchase price?

Answer rating: 100% (QA)

a To calculate the cost of the option multiply the option price by the number of shares it represent... View the full answer