Question
Refer to the stock options on Microsoft in the Figure 2.10. Suppose you buy a November expiration call option on 200 shares with the excise
Refer to the stock options on Microsoft in the Figure 2.10. Suppose you buy a November expiration call option on 200 shares with the excise price of $140. a-1. If the stock price in November is $144, will you exercise your call? multiple choice 1 Yes No a-2. What is the net profit/loss on your position? (Input the amount as a positive value.) 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.) b-1. Would you exercise the call if you had bought the November call with the exercise price $135? multiple choice 2 Yes No b-2. What is the net profit/loss on your position? (Input the amount as a positive value.) 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.) c-1. What if you had bought an November put with exercise price $140 instead? Would you exercise the put at a stock price of $140? multiple choice 3 Yes No c-2. What is the rate of return on your position? (Negative value should be indicated by a minus sign.)
Step 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