Several rumors concerning Wyslow, Inc. stock have started circulating. These rumors are 6. causing the market price of the stock to be quite volatile. Given this situation, you decide to buy both a one-month put and a call option purchased the call at a quoted price of $.20 and the put at a price of $2.10. What will be your profit on these option positions if the stock price is $4 on the day the options expire? on this stock with an exercise price of $15. You (Assuming that one option contract is for right to purchase and sell 100 shares. Therefore, option price of $0.20 means it will cost you 20 per contract) an -$230 b. a. $870 $1,100 d. $910 C. $1,310 e. 7. You own one call option with an exercise price of $55 on Doo Little stock. The stock is currently selling for $55.20 a share but is expected to sell for either $54 or $62 a share in one year. The risk-free rate of return is 2.5 percent. What is the current option price if the option expires one year from now? a. $0.55 b. $0.79 c. $1.67 d. $2,43 e. $2.20 The price of Ervin Corp. stock will be either $75 or $95 at the end of the year. The current stock price is 80S. What is the price of a call option with the exercise price of $85 if the risk free rate is 10%? 8. Buyl shere & a. $11.82 b. $5.91 c. $2.96 d. $2.43 e. $2.20 380 75 AS195 a 10 9. You have looked in the financial press and found the following information: Current stock price $45, Call price $ 2.00, Exercise price year. What is a fair price of a put option with an exercise price of $50 and expiration period of 1 year? a. $11.82 b. $5.91 c. $4.62 d. $5.12 e. $2.20 SErst $50, Risk-free rate 5 %, Expiration- 1 PVCx) stP=Ct+ PV=4.61 e 200+47.61 45p7200(5 105