question 01

question 2

Consider an exchange-traded call option contract to buy 500 shares with a strike price of $40 and maturity in four months. Explain how the terms of the option contract change when there is (a) A 10% stock dividend (b) A 10% cash dividend (c) A 4-for-1 stock split A trader writes five naked put option contracts, with each contract being on 100 shares. The option price is $10, the time to maturity is six months, and the strike price is $64. (a) What is the margin requirement if the stock price is $58 ? (c) How would the answer to (a) change if the stock price were $70? (d) How would the answer to (a) change if the trader is buying instead of selling the options