Question
You had a long position on a call option on the growth in Financial Companies Payroll System (FCPS) with a strike price of 209,000 jobs.
You had a long position on a call option on the growth in Financial Companies Payroll System (FCPS) with a strike price of 209,000 jobs. The FCPS call contract pays $100 for every job created beyond the strike price.
a. What is the value of the option if job growth is 194,000? (Round your answer to the nearest dollar.)
Option value $
b. What is the value of the option if job growth is 216,000? (Round your answer to the nearest dollar.)
Option value $
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown, Sanford J. Leeds
11th Edition
1305262999, 1305262997, 035726164X, 978-1305262997
