Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please answer b1 and b2 and b3 Strike Call Put FIGURE 2.10 Option prices on Apple (AAPL), April 18, 2017 Expiration May 12, 2017 May
please answer b1 and b2 and b3
Strike Call Put FIGURE 2.10 Option prices on Apple (AAPL), April 18, 2017 Expiration May 12, 2017 May 12, 2017 May 12, 2017 June 16, 2017 June 16, 2017 June 16, 2017 135 140 145 135 7.63 3.80 1.61 8.05 1.17 2.71 5.60 2.07 3.90 6.65 Note: Apple stock price on April 18, 2017 was $141.20. Source: Compiled from data downloaded from Nasdaq, www.nasdaq.com. 140 4.80 145 2.50 Refer to the stock options on Apple in the Figure 2.10. Suppose you buy an June expiration call option on 20 shares with the excise price of $135. a-1. If the stock price in June is $150, will you exercise your call? Yes a-2. What is the net profit/loss on your position? (Input the amount as a positive value.) Net profit of $ 139 a-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of 86.34% return b-1. Would you exercise the call if you had bought the June call with the exercise price $145? Yes o No b-2. What is the net profit/loss on your position? (Input the amount as a positive value.) Net profit of $ 150 b-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of 2.00% return C-1. What if you had bought an June put with exercise price $135 instead? Would you exercise the put at a stock price of $135? o Yes No c-2. What is the rate of return on your position? (Negative value should be indicated by a minus sign.) Rate of (100% returnStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started