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- Maturity (days) Strike 66 Part1: SO 620 595.9355586 ● r (annualized) O 0.056329721 11% Option Type Call Use the data you are provided with on blackboard to replicate and interpret the following figures Call price as a function of the current underlying price S0 or put price as a function of the current underlying price SO depending on the data assigned to you. Carefully interpret the figures. Make sure you are not simply describing the figures but that you are answering the question of why we observe the patternBasic Option Strategies Profit Computation Assume the below prices for calls and puts: Call Call Call Put Put Put Strike Jul Aug Oct Jul Aug Oct 165 2.7 5.25 8.1 2.4 4.75 6.75 170 0.8 3.25 6 5.75 7.5 9 Buy one August 170 put contract. Hold it until expiration. Identify the breakeven stock price at expiration. What is the profit/loss if ST=190? Buy one October 165 call contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185 Buy 100 shares of stocks and buy one August 165 put contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and the maximum loss. What is the profit/loss if ST=150. Buy 100 shares of stock and write one October 170 call contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the…Basic Option Strategies Profit Computation Assume the below prices for calls and puts: Call Put Strike Jul Aug Oct Jul Aug Oct 165 2.7 5.25 8.1 2.4 4.75 6.75 170 0.8 3.25 6 5.75 7.5 1. Buy one August 170 call contract. Hold it until expiration. lIdentify the breakeven stock price at expiration. What is the profit/loss if ST=190? What is the maximum profit? 2. Buy one October 165 put contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185
- help meBasic Option Strategies Profit Computation Assume the below prices for calls and puts: Call Put Strike Jul Aug Oct Jul Aug Oct 165 2.7 5.25 8.1 2.4 4.75 6.75 170 0.8 3.25 6 5.75 7.5 9 Buy one August 170 call contract. Hold it until expiration. Identify the breakeven stock price at expiration. What is the profit/loss if ST=190? What is the maximum profit? Buy one October 165 put contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185What is the appropriate risk-free rate on May 11, 2022 for an option that expires on Oct 20, 2022 if the T-bill with closest maturity is quoted as 3.65/3.44? a. What is the un-annualized discount rate? Round your answer to two decimals. b. What is the T-bill price? Round your answer to two decimals b . What is the approximate risk-free rate? % Round your answer to two decimals
- QUESTION 30 Johnson & Johnson (ticker:JNJ) is traded at $172.21 per share when Nancy sold a call option today. The call premium is $3.05 and the exercise price is $180 The option will be expired on Jan. 20, 2024. a. What is Nancy's expectation about JNJ's price between now and expiration date? Also, state reasons why sellling a call is beneficial given her expectation of the price movement. b. What are Nancy's maximum profit and maximum loss? c. Show the profit/loss if, at the expiration date, the JNJ price is (1) $150, (2) $182, (3) $190. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph ABC ✔ ✓ Π "Ω Θ Arial 田く HH = 10pt 田田田 Ev A V 田旺图 † {} Ix ४ Gô Ky Q5 + ≡≡≡≡ € € X² X₂ & >ITCompany RJay RJay Sell-Mart Xenon Time to Expiration (months) Company RJay RJay Sell-Mart Xenon 1 $ 2 5 6 Time to Expiration (months) 1 2 5 6 Strike $ 60 70 60 7.50 Strike $ b. Now assume that the effective annual interest rate is 6.70%, which corresponds to a monthly interest rate of 0.54%. Calculate the present value of each call option's exercise price and the adjusted intrinsic value for each call option. (Do not round your intermediate calculations and round your final answers to 2 decimal places.) So 60 $ 70 60 7.50 62.92 62.84 69.80 6.78 So Intrinsic Value $ 62.92 62.84 69.80 6.78 2.92 0.00 9.80 0.00 PV(X) Adjusted Intrinsic ValueBasic Option Strategies Profit Computation Assume the below prices for calls and puts: Call Put Strike Jul Aug Oct Jul Aug Oct 165 2.7 5.25 8.1 2.4 4.75 6.75 170 0.8 3.25 6 5.75 7.5 9 Buy one August 170 put contract. Hold it until expiration. Identify the breakeven stock price at expiration. What is the profit/loss if ST=190? Buy one October 165 call contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185 Buy 100 shares of stocks and buy one August 165 put contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and the maximum loss. What is the profit/loss if ST=150. Buy 100 shares of stock and write one October 170 call contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit…
- Contract Name Last Trade Date Last Price Bid Ask Change % Change Volume Open Interest Implied Volatility AAPL200417C00105000 (Links to an external site.) 2019-11-19 3:53PM EST 105.00 (Links to an external site.) 160.65 160.75 165.40 0.00 - 20 100 78.61% 7. Is this contract a call or a put option? 8. How much do you need to pay to buy this option contract? Hint: when you buy the contract, you need to use Ask price.Q4 Using the Put-Call Parity relationship, find the value of a put option (same strike, expiration as the call option) using the following information: Current stock price 6% Call option strike price $6.56 Option time to maturity $33 $32 1 years risk-free rate Call option current value SHOW WORK HERE, HIGHLIGHT FINAL ANSWER IN YELLOWUsing put-call parity, if the price of an At-the-Money Call option maturing in 1 day is $3.14, what is the price of an of an At-the-Money Put option maturing in 1 day (give an approximation)? A. $0.95 B. $2.86 C. $3.14 D.$3.26