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cpuld anyone help me with this and explain a little bit For the following problems consider a company XYZ whose current stock price is $49.
cpuld anyone help me with this and explain a little bit
For the following problems consider a company XYZ whose current stock price is $49. 1. What is the intrinsic value of a $50 strike put option whose price is $7.50 ? 2. What is the time value of a $50 strike call option whose price is $7 ? 3. What are my two breakeven (future stock prices) points if I perform a straddle on this stock, buying both the $50 strike put at $7.50 and $50 strike call at $7.00? 4. How much do I gain/lose if I execute #3 above and stock closes at $44.50 on the expiration date of the options (assume 1 contract of the put and call were purchased)? 5. What is my breakeven if I buy a $60 strike call option for $0.50? 6. Explain how you could create a covered call for 300 shares worth of XYZ using options listed previously. 7. Find the maximum risk and maximum reward for #6. 8. If XYZ has a $70 strike call option that has a current bid price of $0.05 and a current ask price of $0.15, what is the spread of this call option? 9. What is the breakeven if I trade a bull call spread purchasing a $60 strike call option for $0.50 and selling a $65 strike call option for $0.25 ? 10. What is the max loss this trade can incur and at what closing stock prices (rango) at expiration is this realized? 11. What is the max gain this trade can incur and at what closing stock prices (rango) at expiration is this realized Step by Step Solution
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