Answered step by step
Verified Expert Solution
Question
1 Approved Answer
What would be your dollar return had you purchased a single contract at the call premium when the SPY price was $464.72 and sold at
What would be your dollar return had you purchased a single contract at the call premium when the SPY price was $464.72 and sold at the expected call premium if the underlying SPY price increased to $490 (do not round the forecasted premium)?
Strike = 485, Last price = 4.64, Bid = 4.67, Ask = 4.72. The current price for SPY is $464.72. The implied volatility for this option is 11.23% per annum. The risk-free rate is 1% per annum.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started