Question
Following options contracts are available: Lansing: Stock Price today $50.00 Call Option price = $5.00 Exercise Price = $48 Contract size: 100 shares Mackinaw: Stock
Following options contracts are available:
Lansing: Stock Price today $50.00 Call Option price = $5.00 Exercise Price = $48 Contract size: 100 shares
Mackinaw: Stock Price today $60.00 Put Option price = $4.00 Exercise Price = $62 Contract size: 100 shares
[10 questions @ 1 points each = 10 points]
Calculate your answer with the following in mind:
Estimates are for the entire position, i.e., total number of contracts bought or sold.
Enter answers with a () sign for loss
Do not enter $ sign
Anna sold 3 contracts of Lansing call. What is her:
1. Initial margin required. for her position
2. Current payoff of her position
3. Profit/loss of her position if the option expires today.
Abe bought 3 contracts of Mackinaw put option. What is his:
4. Current payoff of his position?
5. Current profit/loss of his position if the option expires today.
6. Intrinsic value component of each option price
Andria bought 3 contracts of the Lansing call option. Lansing stock just declared 3for1 stock split. What
adjustment would be made to each contract of Lansing?
7. Exercise price
8. Number of stocks per contract
Alex sold 3 contracts of Mackinaw put option.
9. Time value component of the option price?
10. Initial margin required?
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