Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Required: a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, or out
Required: a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, or out of the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. (Enter "O" if there is no profit or return from not exercising the option. Round your answers to 2 decimal places. Loss amounts should be indicated by a minus sign.) In/Out of the Money? Exercise? Net Profit Return Company ABC Option Call Put Call Put Today's Stock Strike Price $ $ 10.00 $ 10.26 $ 10.00 $ 10.26 $ 25.00 $ 23.93 $ 25.00 $ 23.93 ABC Premium $ 1.14 $ 0.99 $ 1.09 $ % % % % % XYZ XYZ 2.29 b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. (Enter "O" if there is no profit or return from not exercising the option. Round your answers to 2 decimal places.) In/Out of the Money? Exercise? Net Profit Return Company ABC Option Call Today's Stock Strike Price $ 10.00 $ 11.23 $ 10.00 $ 11.23 $ 25.00 $ 27.00 $ $ 25.00 $ 27.00 ABC Put Premium $ 1.14 $ 0.99 $ 1.09 $ $ 2.29 % % % % Call XYZ XYZ Put
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