Question: 2. Use the table below to answer the following questions for an Amazon option Expiration Strike Call Premium Put Premium Feb-23 110 $4.50 $4.35 Feb-23

2. Use the table below to answer the following questions for an Amazon option

Expiration	Strike	Call Premium	Put Premium
Feb-23	110	$4.50	$4.35
Feb-23	115	$2.55	$7.55
Feb-23	120	$1.34	$11.20

a. If you buy the call option with a $115 Strike price do you exercise the call if AMZN stock is at 117? Why or why not? If you do, what is the profit.

b. What if you bought a put with a strike of 120 (Assume the stock price is still $117)

c. What if you bought a call with a strike of 110 (Assume the stock price is still $117)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

ints ellook Print Problem 3-28A (Algo) Show how the events affect the financial statements using a horizontal tatements model LO 3-2, 3-3 The following events pertain to Super Cleaning Company. 1....

2. Use the table below to answer the following questions for an Amazon option a. If you buy the call option with a $115 Strike price do you exercise the call if AMZN stock is at 117 ? Why or why not?...

Financial Engineering ASSIGNMENT A QI. A swap bank has to entail certain risks which are inherent to the swap business and are interrelated Explain the risks involves in swap business. Q2. Call...

DOZIER INDUSTRIES (B) Richard Rothschild, the chief financial officer of Dozier Industries, was still contemplating how best to manage the exchange risk related to the company's new sales contract....

2 35 5 n class we went over exactly what happened in the movie 'Trading Places.' Dan Aykroyd (DA) and Eddie Murphy (EM) (pic below) got a hold of the actual orange crop report, altered it, and gave...

a) (5 points) Suppose we play a strangle by buying a 542.5 call and a 527.5 put on Table 1 and close at Table 2. Calculate the profit or loss AND rate of return. b) (5 points) Suppose we waited and...

7. What are the primary motives for a hedger and a speculator in the derivatives market? If a wheat farmer sells wheat futures, is that hedging or speculating? Explain. 8. Explain how a manufacturer...

The premium for September 19th call option on Canadian dollar is $0.04, and the strike price is $0.80. Assume that on September 19 the spot rate for the Canadian dollar rose to $0.92. What is the USD...

Please answer the following questions with explanation 1. The current spot exchange rate is $1.55/ and the three-month forward rate is $1.50/. You enter into a short position on 1,000. At maturity,...

For the year ending December 31, 2011, Micron Corporation had income from continuing operations before taxes of $1,200,000 before considering the following transactions and events. All of the items...

Explore the various ways in which business customs can affect the structure of competition.

Q9. What is the vapour Density of 1 L of a gas that weighs 2.05 g at STP?

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".