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The following quotes were observed for options on a given stock on November 30, 2018. These are American calls. Calls Puts Strike Nov Dec Jan
The following quotes were observed for options on a given stock on November 30, 2018. These are American calls. Calls Puts Strike Nov Dec Jan Nov Dec Jan 105 8.40 10 11.50 5.30 1.30 2.00 110 4.40 7.10 8.30 0.90 2.50 3.80 115 1.50 3.90 5.30 2.80 4.80 4.85 The stock price today is $113.25 9. What is your profit per option if you buy the December 110 call and the stock is trading at $120.00 on expiration date of this option? a. $6.75 b. $110.00 c. $O d. $2.90 10. According to the formula for put-call parity, what should be the theoretical price of the December 110 call? Assume the risk free rate is 2.5%, and that the option has 30 days till expiration a. $113.25 b. $7.10 c. $5.97 d. $6.06 11. If you sold the December 105 call, what is your maximum possible loss? a. $10 b. $113.25 c. unlimited d. $6.75 12. Which of the following strategies would be considered a "straddle'? a. Buy the November 115 call and sell the January 105 put b. Buy the November 115 call and the November 110 call c. Buy the stock and also buy the January 110 put d. Buy the November 110 call and the November 110 put
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