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Part 3 10 Marks) Evans Ple is also looking to undertake traded options with several speculators on the London Stock Exchange and have been offered
Part 3 10 Marks) Evans Ple is also looking to undertake traded options with several speculators on the London Stock Exchange and have been offered the following: Current Market Value Exorcke Price Call Premium Put Premium 122.50p 105p 120p 130p 32.50p 22.50p 15.00p 22.500 14.25p 11.00p Evans Ple have decided to adopt the following strategy Write one call option with an exercise price of 105p. Write one call option with an exercise price of 130p, Purchase two call options with an exercise price of 120p. Evans Pic buy and sell options in contracts of 1,000 units. Required Calculate and comment on the profit or loss and break-even Evans Plc would make with share prices ranging between 100p to 140p (in intervals of Sp) using their strategy above. (10 Marks)
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