The following prices are available for call and put options on a stock priced at $50 The risk free rate is 6 percent and the volatility is 0 35 The March options have 90 days remaining and the June options have 180 days remaining The Black Scholes model was used to obtain the prices Calls Puts Strike March June March June 45 6 84 8 41 1 18 2 09 50 3 82 5 58 3 08 4 13 55 1 89 3 54 6 08 6 93 Assume that each transaction consists of one contract (for 100 shares) unless otherwise indicated Use this info to answer questions 11 to 15 For questions 11 and 12, suppose an investor expects the stock price to remain at about $50 and decides to execute a butterfly spread using the June calls Answer questions 13 through 15 about a long straddle constructed using the June 50 options 13 What will the straddle cost a $145 b $690 C $971 d $413 e none of the above 14 What are the two breakeven stock prices at expiration a $55 58 and $45 87 b $54 13 and $45 87 C $55 58 and $44 42 d $59 71 and $40 29 e none of the above The following prices are available for call and put options on a stock priced at $50 The risk free rate is 6 percent and the volatility is 0 35 The March options have 90 days remaining and the June options have 180 days remaining The Black Scholes model was used to obtain the prices Calls Puts Strike March June March June 45 6 84 8 41 1 18 2 09 50 3 82 5 58 3 08 4 13 55 1 89 3 54 6 08 6 93 Assume that each transaction consists of one contract (for 100 shares) unless otherwise indicated Use this info to answer questions 11 to 15 For questions 11 and 12, suppose an investor expects the stock price to remain at about $50 and decides to execute a butterfly spread using the June calls Answer questions 13 through 15 about a long straddle constructed using the June 50 options 13 What will the straddle cost a $145 b $690 C $971 d $413 e none of the above 14 What are the two breakeven stock prices at expiration a $55 58 and $45 87 b $54 13 and $45 87 C $55 58 and $44 42 d $59 71 and $40 29 e none of the above

Question

The following prices are available for call and put options on a stock priced at $50  The risk  free rate is 6 percent and the volatility is 0 35  The March options have 90 days remaining and the June options have 180 days remaining  The Black Scholes model was used to obtain the prices  Calls Puts Strike March June March June 45 6 84 8 41 1 18 2 09 50 3 82 5 58 3 08 4 13 55 1 89 3 54 6 08 6 93 Assume that each transaction consists of one contract (for 100 shares) unless otherwise indicated  Use this info to answer questions 11 to 15 For questions 11 and 12, suppose an investor expects the stock price to remain at about $50 and decides to execute a butterfly spread using the June calls  Answer questions 13 through 15 about a long straddle constructed using the June 50 options  13  What will the straddle cost  a  $145 b  $690 C  $971 d  $413 e  none of the above 14  What are the two breakeven stock prices at expiration  a  $55 58 and $45 87 b  $54 13 and $45 87 C  $55 58 and $44 42 d  $59 71 and $40 29 e  none of the above The following prices are available for call and put options on a stock priced at $50  The risk  free rate is 6 percent and the volatility is 0 35  The March options have 90 days remaining and the June options have 180 days remaining  The Black Scholes model was used to obtain the prices  Calls Puts Strike March June March June 45 6 84 8 41 1 18 2 09 50 3 82 5 58 3 08 4 13 55 1 89 3 54 6 08 6 93 Assume that each transaction consists of one contract (for 100 shares) unless otherwise indicated  Use this info to answer questions 11 to 15 For questions 11 and 12, suppose an investor expects the stock price to remain at about $50 and decides to execute a butterfly spread using the June calls  Answer questions 13 through 15 about a long straddle constructed using the June 50 options  13  What will the straddle cost  a  $145 b  $690 C  $971 d  $413 e  none of the above 14  What are the two breakeven stock prices at expiration  a  $55 58 and $45 87 b  $54 13 and $45 87 C  $55 58 and $44 42 d  $59 71 and $40 29 e  none of the above

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The following prices are available for call and put options on a stock priced at $50. The risk- free rate is 6 percent and the

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