Question
Use the information in the following table to answer questions A and B. (Assume options can be exercised prior to expiry date). December 2019, Sydney
Use the information in the following table to answer questions A and B. (Assume options can be exercised prior to expiry date).
December 2019, Sydney Ltd
Last share (sale) price = $16.00
Strike Price Jun July August_
Call Options _
$17.00 $0.80 $1.45 $1.60
Put Options _
$17.00 $1.30 $2.00 $1.80
Required:
A. Suppose you buy 300 Jun $17.00 call contracts. How much will you pay, ignoring commissions? Assume Sydney share price is $21 any day prior to expiry date, then what is your net gain. (5 marks)
- Suppose you buy 30 August $17 put contracts. What is your maximum net gain? On the expiration date, Sydney Share is selling for $13.00 per share. What is your options worth?
(5 marks)
Answer 8: [Answer here]
- (Calculate and type your answer)
| Share Price | Exercise Price | Option price | Net payoff per contract | Total payoff |
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[Show workings here]
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- (Calculate and type your answer)
| Share Price | Exercise Price | Option price | Net payoff per contract | Total payoff |
|
|
|
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|
[Show workings here]
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The Economics Of Money Banking And Finance
Authors: Peter Howells, Keith Bain
2nd Edition
0273651080, 978-0273651086
