Question 2

The price of Apple shares on this date was $101.05. The first two columns give the expiration month and exercise (or strike) price for each option. We have included listings for call and put options with exercise prices $95 through $105 per share and with expiration dates in September and October of 2014 Apple (AAPL) Expiration Underlying stock price-$101.05 Strike 95 95 100 100 105 105 Call 6.20 6.35 2.20 2.62 0.36 0.66 Put 0.21 0.33 1.18 1.55 4.35 4.75 October October October Question 1. What would be the profit or loss per hare of stock to an investor who bought the October 2014 expiration Apple call option with exercise price $100. If the stock price at the expiration of the option is $110? What about a purchaser of the put option with the same exercise price and expiration? Answer: Question 2: Based on the Apple options, suppose you buy an October expiration call option with exercise price $100. a. If the stock price in October is SO2, will you exercise your call? What are the profit and rate of return on your position? What if you had bought the October call with exercise price $95? What if you had bought an October put with exercise price $100? b. c