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Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $29. Calls Puts Strike Option Expiration
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $29. |
Calls | Puts | |||||||||||||||||
Strike | ||||||||||||||||||
Option | Expiration | Price | Vol. | Last | Vol. | Last | ||||||||||||
Macrosoft | Feb | 31 | 87 | .43 | 42 | 1.43 | ||||||||||||
Mar | 31 | 63 | .67 | 24 | 1.84 | |||||||||||||
May | 31 | 24 | .95 | 13 | 2.26 | |||||||||||||
Aug | 31 | 5 | 1.16 | 5 | 2.30 | |||||||||||||
a. | Suppose you buy 12 contracts of the February 31 call option. How much will you pay, ignoring commissions? |
Suppose you buy 12 contracts of the February 31 call option. Macrosoft stock is selling for $32 per share on the expiration date. |
b-1. | How much is your options investment worth? |
b-2. | What if the terminal stock price is $31? |
Suppose you buy 12 contracts of the August 31 put option. |
c-1. | What is your maximum gain? |
c-2. | On the expiration date, Macrosoft is selling for $25 per share. How much is your options investment worth? |
c-3. | On the expiration date, Macrosoft is selling for $25 per share. What is your net gain? |
Suppose you sell 12 of the August 31 put contracts. |
d-1. | What is your net gain or loss if Macrosoft is selling for $27 at expiration? (Enter your answer as a positive value.) |
d-2. | What is your net gain or loss if Macrosoft is selling For $33 at expiration? (Enter your answer as a positive value.) |
d-3. | What is the break-even stock price? (Round your answer to 2 decimal places, e.g., 32.16.) |
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