Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You purchase 23 call option contracts with a strike price of $125 and a premium of $2.80. Assume the stock price at expiration is $133.46.

You purchase 23 call option contracts with a strike price of $125 and a premium of $2.80. Assume the stock price at expiration is $133.46.

1.

What is your dollar profit?(Do not round intermediate calculations. Omit the "$" sign in your response.)

Dollar profit $

2.

What if the stock price is $119.41?(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Omit the "$" sign in your response.)

If the stock price is $119.41, the call is(Click to select)in-the-moneyworthless, so the dollar return is $.

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

Survey Of Economics, Principles, Applications, And Tools

Authors: Arthur O'Sullivan, Steven M. Sheffrin, Stephen J. Perez

5th Edition

0132556073, 978-0132556071

More Books

Students also viewed these Finance questions

Question

Demonstrate knowledge of the company/organization and the position.

Answered: 1 week ago