Question
Nike is currently selling at 102.50. You buy a call that expires next March 3, with an exercise price of $105.00. The call costs $10.34
Nike is currently selling at 102.50. You buy a call that expires next March 3, with an exercise price of $105.00. The call costs $10.34 per share
A: What is the intrinsic value of the call today? B: What is the time value of the call today? C: You exercise the call just before expiration. Ignoring commissions, what is your profit per share? D: What is your HPR? E: If the price of the stock was $103.34 on the expiration date, what is the value of the call?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Analyzing your Nike call option A Intrinsic Value Since the current stock price 10250 is lower than the exercise price 10500 the call option is curren...
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Step: 2
Step: 3
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
