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 $135.
Required:
a-1. If the stock price at option expiration is $142, will you exercise your call?
multiple choice 1
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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 $130? 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 the November put with exercise price $135 instead? Would you exercise the put at a stock price of $135? 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.)
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