You sell one put option contract with a strike price of $25/share and a premium of $1.20.

Fantastic news! We've Found the answer you've been seeking!

Question:

You sell one put option contract with a strike price of $25/share and a premium of $1.20. At expiration, the stock was selling for $21/share

What is the total profit or loss on your investment?

Related Book For answer-question

Investments An Introduction

ISBN: 978-1305638419

12th edition

Authors: Herbert B. Mayo

See More Books

Posted Date: May 18, 2023 01:23 AM

See More Questions

KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
1. You own a call option with a strike price of $27.50.What is your payoff on this option contract if the underlying stockis selling for $31.20 on the option expiration date? The payoff amount is the...
Last Sale Net Bid Ask Open Int Puts Last Sale Net bid Ask Vol Open Int 16Aug 155.00(1619H155-E) 6.45 0.75 6.95 7.25 9 16Aug 155.00(1619T155-E) 1.18 (0.75) 1.17 1.25 61 4505 16Aug 166.00(1619H160-E)...
Taft Corporation operates primarily in the United States. However, a few years ago it opened a plant in Spain to produce merchandise to sell there. This foreign operation has been so successful that...
Ashley Company is a young and growing producer of electronic measuring instruments and technical equipment. You have been retained by Ashley to advise it in the preparation of a statement of cash...
Dynamic stability of an airplane is _____ to a disturbance. a. the immediate reaction b. the long time reaction c. oscillatory in nature. d. Both (b) and (c).
Find the critical value f0.05 for F7,20.
Lighthouse Company anticipates total sales for June and July of $ 420,000 and $ 398,000, respectively. Cash sales are normally 60% of total sales. Of the credit sales, 20% are collected in the same...
Intro A project has expected cash flows with a present value of $79.5 million. The annual standard deviation of the project's returns is 60%. If the project does not go well, the company can end it...
A national catalog and Internet retailer has three warehouses and three major distribution centers located around the country. Normally, items are shipped directly from the warehouses to the...
Paul works in an organizational structure where the lines of communication are very clear; however, managers often feel isolated and lack the resources needed to achieve company goals. Paul most...
You work for a local fitness center called Super Fit. The owners of Super Fit would like to expand their business and add a running track and a large pool. They have drafted the following letter to...
Evaluate the following subject lines. Is one subject line in each group clearly best? Or does the best line depend on company culture, whether the message is a paper memo or an email message, or on...
Rewrite the following negative message so it follows the guidelines for negative messages: Dear Valued Employee: I'm afraid the company will not be able to grant you your requested vacation time at...
Three days ago, one of your subordinates forwarded to everyone in the office a bit of email humor hed received from a friend. Titled You know youre Southern when . . . , the message poked fun at...
Repeat problem 15 by assuming Data From Problem 15: The boundaryvalue problem for a cantilevered beam can be written as w(x)=c(x)=cx+2x+03x4 i=1
The concept of independence in appearance states that CPAS must evaluate whether a situation would threaten independence from the viewpoint of which type of person? Multiple Choice AICPA ethics...
Test your confidence in the following Project Decisions: SI. # Question 01 02 03 04 05 06 07 08 09 10 How many years did it take to construct the largest Egyptian Pyramid- Pyramid of Cheops? When was...
Ares Capital Corporation (ARCC) announced that it was acquiring Allied Capital (ALD). The terms of the acquisition specified that one share of ALD would become 0.325 share of ARCC. Prior to the...
1. What conclusion(s) are indicated by the ratio analysis? 2. What is the firm's current payout ratio compared to its historical payout ratio? 3. What are the annual growth rates in the earnings per...
1. What are the primary differences between investments in corporate stock versus corporate bonds? 2. Since bonds pay interest, does that imply the individual's risk exposure is less for investing in...
What is a wave equation? What is a traveling-wave solution?
Fill in the Blank. In the wave-solution $w(x, t)=w_{1}(x-c t)+w_{2}(x+c t)$, the first term represents the wave that propagates in the __________ directions of $x$. conditions
Find the time it takes for a transverse wave to travel along a transmission line from one tower to another one $300 \mathrm{~m}$ away. Assume the horizontal component of the cable tension as 30,000...

You sell one put option contract with a strike price of $25/share and a premium of $1.20.

Question:

Expert Answer:

To calculate the total profit or loss on your investment from selling a put option contract we need ... View the full answer

Investments An Introduction

Students also viewed these finance questions