Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have purchased a put option on Teledoc common stock. The option has an exercise price of $82 and Teledoc's stock currently trades at $83.18.

image text in transcribed
You have purchased a put option on Teledoc common stock. The option has an exercise price of $82 and Teledoc's stock currently trades at $83.18. The option premium is $1.49 per contract. One option equals 100 shares of the underlying stock. a. Caiculate your net profit on the option if Teledoc's stock price falls to $80 and you exercise the option. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations.) b. Calculate your net profit on the option if Teledoc's stock price does not change over the life of the option. (Negative amount should be indlented by a minus sign.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Extreme Events In Finance A Handbook Of Extreme Value Theory And Its Applications

Authors: Francois Longin

1st Edition

1118650190, 978-1118650196

More Books

Students also viewed these Finance questions

Question

4. Choose appropriate and powerful language

Answered: 1 week ago

Question

2. Choose an appropriate organizational pattern for your speech

Answered: 1 week ago