Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose a put option on XYZ stock has a price (or premium) of $5.00 and a strike price of $46. You decide to short (or

image text in transcribed

Suppose a put option on XYZ stock has a price (or "premium") of $5.00 and a strike price of $46. You decide to short (or write) the option, and suppose that at expiration XYZ stock sells for $56. What is your payoff at expiration and what is your profit? Below, be careful to note some numbers have negative signs and some do not. Payoff = -$10, Profit = +$5 a. b. Payoff = $0, Profit = -$5 Payoff = -$10, Profit = = -$15 O c. d. Payoff = -$10, Profit = -$5 Payoff = $0, Profit = -$5 e. Of. Payoff = $10, Profit = +$5 Payoff = +$ 10, Profit = g. -$5 h. Payoff = +$10, Profit = +$15 O i. Payoff = $0, Profit = +$5 O j. Payoff = $0, Profit = -$15

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

What is the effect of word war second?

Answered: 1 week ago