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Refer to the stock options on Microsoft in the Figure 2.10. Suppose you buy a September expiration call option on 400 shares with the excise
Refer to the stock options on Microsoft in the Figure 2.10. Suppose you buy a September expiration call option on 400 shares with the excise price of $135. Required: a-1. If the stock price at option expiration is $139, will you exercise your call? 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.) FIGURE 2.10 Stock options on Microsoft, September 4, 2019 Note: Microsoft stock price on this day was $137.49. Source: Compiled from data downloaded from Yahoo! Finance. c-1. What if you had bought the September put with exercise price $135 instead? Would you exercise the put at a stock price of $135 ? Yes No c-2. What is the rate of return on your position? (Negative value should be indicated by a minus sign.) 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.) b-1. Would you exercise the call if you had bought the September call with the exercise price $130 ? Yes No b-2. What is the net profit/loss on your position? (Input the amount as a positive value.)
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