Question
Consider a call option on Activision Blizzard (ATVI) that matures on November 17. The option has a strike price of $55 and a premium of
Consider a call option on Activision Blizzard (ATVI) that matures on November 17.
The option has a strike price of $55 and a premium of $2.50.
a.
Plot the contingency graph for the option. Be sure to label maximum
gains/losses, the breakeven point, and moneyness for both the buyer and
seller.
b.
At maturity, ATVI shares are trading for $45. What are the profits to the
buyer and seller?
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Capital Markets Institutions And Instruments
Authors: Frank J. Fabozzi, Franco Modigliani
4th Edition
0136026028, 9780136026020
