Dae Finance 421 Homework 5 Finance 421 (Towner) - Homework 5 Due Tuesday 11/20/2018 (c) Assuming AAPL's share price decreases by 10% between now and December 21st, compute the payf, profit, and return for each of the following positions: Name: (i) A ong position in 100 call options, bought at $26.50 per call. Grade 20 () A long position in 100 put aptions, bought at $13.30 per put. As a reminder, the payoff from an options position is the value of the option at expiration ignoring the premium paid), the profit is the payoff mins the premium, and the return equals the profit divided by the initial premium. Problem 1: Options Basics (5 points) magine AAPL steck cloeed at 8520 on November 15th. At that time, the ollowing options wure traded foc AAPL stocs 1 or put Expiration date Strike Cll December 21st Pat December 21st 526.50 313.30 100 call options Long 100 put options 8505 Assume the interest rate is 0%. ) According to put-call parity, whst the prsent value af AAPL dividends betwn Novmber 15th and December 21st? Present value of dividends (b) Assuming AAPL'a are pris increases by 5% between now Rnd December 21st, compute the payff, proit, and return fcr each af the following positios: )A long poitia iAlong poeition in 100 put options, bought at S13.30 per put. n in 100 call opticns, bought at $28.50 per As a reminder, the payo from an options position is the value of the opticn at cxpiration ignring the premium pid). the prolit is the pay minus the premium, ad the retur equals the profit divided hy the initial peemiam ition rofit Return Dae Finance 421 Homework 5 Finance 421 (Towner) - Homework 5 Due Tuesday 11/20/2018 (c) Assuming AAPL's share price decreases by 10% between now and December 21st, compute the payf, profit, and return for each of the following positions: Name: (i) A ong position in 100 call options, bought at $26.50 per call. Grade 20 () A long position in 100 put aptions, bought at $13.30 per put. As a reminder, the payoff from an options position is the value of the option at expiration ignoring the premium paid), the profit is the payoff mins the premium, and the return equals the profit divided by the initial premium. Problem 1: Options Basics (5 points) magine AAPL steck cloeed at 8520 on November 15th. At that time, the ollowing options wure traded foc AAPL stocs 1 or put Expiration date Strike Cll December 21st Pat December 21st 526.50 313.30 100 call options Long 100 put options 8505 Assume the interest rate is 0%. ) According to put-call parity, whst the prsent value af AAPL dividends betwn Novmber 15th and December 21st? Present value of dividends (b) Assuming AAPL'a are pris increases by 5% between now Rnd December 21st, compute the payff, proit, and return fcr each af the following positios: )A long poitia iAlong poeition in 100 put options, bought at S13.30 per put. n in 100 call opticns, bought at $28.50 per As a reminder, the payo from an options position is the value of the opticn at cxpiration ignring the premium pid). the prolit is the pay minus the premium, ad the retur equals the profit divided hy the initial peemiam ition rofit Return