Question
Hey, my professor is giving me a second chance to try to get the answers correct. I'll be working them out. Let's see if we
Hey, my professor is giving me a second chance to try to get the answers correct. I'll be working them out. Let's see if we can figure it out.
1. Suppose you believe that Bennett Environmental's stock price is going to increase from its current level of $ 39.13 sometime during the next 7 months. For $ 298.93 you could buy a 7-month call option giving you the right to buy 100 shares at a price of $ 26 per share. If you bought a 100-share contract for $ 298.93 and Bennett's stock price actually changed to $ 34.01 , your net profit (or loss) after exercising the option would be ______? Show your answer to the nearest .01. Do not use $ or , signs in your answer. Use a - sign if you lose money on the contract.
2.Suppose you believe that Du Pont's stock price is going to decline from its current level of $ 81.65 sometime during the next 5 months. For $ 521.54 you could buy a 5-month put option giving you the right to sell 100 shares at a price of $ 76 per share. If you bought a 100-share contract for $ 521.54 and Du Pont's stock price actually changed to $ 83.33 at the end of five months, your net profit (or loss) after behaving rationally on the decision to exercise the option would be ______? Show your answer to the nearest .01. Do not use $ or , signs in your answer. Use a - sign if you lose money on the contract.
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