Opions protts and losses For each of the 100-ahare optione shown in the followin

Question

Opions protts and losses For each of the 100-ahare optione shown in the following table, utheunderlying stock price at expiration and other infomation to denermine the amount of proft or loss an investor would have had, ignoring brokeage ees The prott0osse per enced on ootonAis The prom 0esso expenenced on octon e is The prom oos$) expenenced on ooton Cs(? The prott (0oss) experenced on opton D is The prost 0064) experienced on ooton E O Data Table cc on the icon locaned on the sop-right coner off the data table below in onr to copy tsconterts nioaspreadineet Underlying stock Type Cost Strike .9mm 143 40 354 Put Put 1522

Explanation / Answer

1: Since Strike price<Underlying stock price, option will be exercised.

Profit on call option = Stock price-Strike price- cost of option

52*100 - 47*100 - 202 = $298

2.

Since Strike price<Underlying stock price, option will be exercised.

Profit on call option = Stock price-Strike price- cost of option

46*100 - 42*100 - 362 = $38

3:

Since Strike price<Underlying stock price, put option will NOT be exercised.

Profit on call option = - cost of option = -$ 622

4: Since Strike price<Underlying stock price, put option will NOT be exercised.

Profit on call option = - cost of option = -$ 298

5: Since Strike price>Underlying stock price, call option will NOT be exercised.

Profit on call option = - cost of option = -$ 493

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.