Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $41. Calls Puts Strike Last 2.63

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $41. Calls Puts Strike Last 2.63 3.04 3.46 3.50 Option Expiration Price Vol Macrosoft Feb Mar May Aug 43 43 43 43 75 36 17 Last 1.63 1.87 2.15 2.36 Vol. 54 36 25 17 a. Suppose you buy 24 contracts of the February 43 call option. How much will you pay, ignoring commissions? Cost Suppose you buy 24 contracts of the February 43 call option. Macrosoft stock is selling for $44 per share on the expiration date b.1 How much is your options investment worth? Payoff b-2 What if the terminal stock price is $43? Payoff Suppose you buy 24 contracts of the August 43 put option c-1 What is your maximum gain? Maximum gain c-2 On the expiration date, Macrosoft is selling for $37 per share. How much is your options investment worth? Position value C-3 On the expiration date, Macrosoft is selling for $37 per share. What is your net gain? Net gain Suppose you sell24 of the August 43 put contracts d-1 What is your net gain or loss if Macrosoft is selling for $38 at expiration? (Enter your answer as a positive value.) Click to select) w (Click to select) d.2 W Loss d 2 VW Lossor loss f Macrosoft is selling For $45 at expiration? (Enter your answer as a Gain d-2 What is your net gain or loss if Macrosoft is selling For $45 at expiration? (Enter your answer as a positive value.) (Click to select) Click to select) d-3W Loss -3Lan tock pice? (Round your answerto 2 decinal places. (e.3.32.16.) n stock price? (Round your answer to 2 decimal places, (e.g. 32.16).) Gain d-3 What is the break-even stock price? (Round your answer to 2 decimal places, (e.g., 32.16).) Break-even

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions