Question
A) Suppose you buy 30 March 100 put option contracts. What is your maximum gain? On the expiration date, Hendreeks is selling for $84.60 per
A) Suppose you buy 30 March 100 put option contracts. What is your maximum gain? On the expiration date, Hendreeks is selling for $84.60 per share. How much is your options investment worth? What is your net gain?
Close | Strike Price | Expiration | Vol. | Last | Vol. | Last |
Hendreeks | ||||||
103 | 100 | Feb | 72 | 5.20 | 50 | 2.40 |
103 | 100 | Mar | 41 | 8.40 | 29 | 4.90 |
103 | 100 | Apr | 16 | 10.68 | 10 | 6.60 |
103 | 100 | Jul | 8 | 14.30 | 2 | 10.10 |
|
B) A call option currently sells for $8. It has a strike price of $80 and five months to maturity. A put with the same strike and expiration date sells for $6. If the risk-free interest rate is 4 percent, what is the current stock price?
C) A stock is currently priced at $35 and will move up by a factor of 1.18 or down by a factor of .85 each period over each of the next two periods. The risk-free rate of interest is 3 percent. What is the value of a put option with a strike price of $40?
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