QUESTION 14

XYZ stock, currently trading at $45, has the following quotes from its option chain expiring in 6-months:: Call Strike = 48, Last Price=2.40, Bid=2.05, Ask=2.75 Put Strike = 43, Last Price= 1.55, Bid=1.08, Ask=1.70 What is the maximum gain (G) and loss (L) per share for a collar contract at these strike prices if you buy XYZ stock at the current price?

G=6.75, L=unlimited

G=4.67, L=0.33

G=3.35, L=1.65

G=4.05, L=0.95

QUESTION 15

You want to sell a naked put option using the following quote. What is your expected annualized rate of return? Put Strike (3-month to expiration) = 30, Last Price = 40, Bid = 1.35, Ask = 1.90

4.50%

27.84%

19.25%

6.33%