FIN 355 Chapter 10: Excercise 10

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jafransp

4 Aug 2021

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SFSU

Department

Finance

Course

FIN 355

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(a) a call on tsla using a strike price of with a december 17th, 2021 expiration = Intrinsic value or payoff = 671. 87 550 = 121. 87. Profit (loss) = 121. 87 + 142. 31 71. 87 = . 31 per share. Maximum profit = . 31 x 100 = ,231. Minimum loss = -550 + 142. 31 = (b) a put on tsla using a strike price of with a december 17th, 2021 expiration = Profit (loss) = 121. 87 68. 89 + 71. 87 = . 85 per share.

Related Questions

You buy a straddle, which means you purchase a put and a call with the same strike price. The put price is $3.40 and the call price is $4.80. Assume the strike price is $95.

What are the per share expiration date profits to this position for stock prices of $85, $90, $95, $100, and $105? (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Round your "Total profit" answers to 2 decimal places. Omit the "$" sign in your response.)

Stock Price	Call Payoff	Put Payoff	Total Payoff	Total Profit
$85	$	$	$	$
$90	$	$	$	$
$95	$	$	$	$
$100	$	$	$	$
$105	$	$	$	$

b.	What are the break-even stock prices? (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

	High	Low
Break-even prices	$	$

greyalligator490

A pound call option with a strike price of $1.4 per euro is priced (i.e., the option premium) is at $0.06 per euro. The spot price is $1.35 per pound. a) What is the intrinsic value of the option? b) What is the breakeven spot exchange rate? c) What is the profit or loss for the buyer of this call option? d) What is the profit or loss for the seller of this call option?

Covered call options

10. Assume you purchase 100 shares of stock at $44 per share and wish to hedge your position by writing a 100-share call option on your holdings. The option has a 40 strike price and a premium of 8.50. If the stock is selling at 38 at the time of expiration, what will be the overall dollar gain or loss on this covered option play? (Consider the change in stock value as well as the gain or loss on the option.) Note that the stock does not pay a cash dividend.

FIN 355 Chapter 10: Excercise 10

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