Use Chart for 1-6

Stock Strike Price Market Price Strike Price Market Price

Prices of Call of call of put of put Ford $8.50 $7.50 $1.90 $7.50 $1.00 IBM $95.50 $90.00 $9.50 $90.00 $1.00 Kroger $28.25 $30.00 $1.10 $30.00 $2.55 1) If you buy 100 shares of ford at the price given and 1 call contract (1 contract=100 shares), your out of pocket costs for both positions is: (this can also be called going long the stock and long the call option). 2) If you buy 100 shares of IBM at the price given and 1 call contract (1 contract =100 shares), your out of pocket costs for both positions is: 3) If you buy 100 shares of IBM at the price given and sell 1 call contract (1 contract= 100 shares), your out of pocket costs for both positions is: 4)If you buy 100 shares of IBM at the price given and BUY 1 Put contract ( 1 contract=100 shares), your out of pocket costs for both positions is: 5)If you buy 1 Call contract on Ford at the price given and BUY 1 Put contract (1 contact=100 shares), your out of pocket costs for both positions is: 6) If you sold 1 Call contract on IBM at the price given and sold 1 Put contract (1 contract = 100 shares), your out of pocket costs for both positions is: (This can also be called "going short the call and short the put option). 7) You buy one Ford Call at today's price. At the call's expiration, the stock is trading at $10 per share. What is your total profit (1 contract is based on 100 shares)? 8) You buy 1 put on Kroger; at expiration, Kroger is trading at $31 per share. What is the profit/loss of this option position? 9) Assume you can either buy IBM stock or one call on IBM at the prices quoted. Assume that at the option's expiration (actual date not given, but sometime in the future), IBM is trading at $105 per share. The holding period return is the ending value less beginning value divided by the beginning value. What is the % return from holding each position from today until the option expires? 10)For the Call on Ford stock, what is the exercise value (per share)? 11)For the call on IBM, what is the premium paid for the option (at this moment in time)? 12)For the call on Kroger, if it is purchased at the market price, how much of a price increase in the stock is needed to breakeven on the trade? 13)For the put on Ford, what is the premium paid for the option (at this moment in time)? 14)For the put on IBM, what is the break-even if you are long the stock and purchased the put at today's value? (Long the stock means you own the stock (at today's price) and your purchas at put at today's price). 15) For the put on Kroger, that is the premium paid for the put option (at this moment in time)