Question: a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the
a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. (Enter "0" If there is no profit or return from not exercising the option. Round your answer to 2 decimal places.) Company Option Strike Today's Stock In/Out of the Price Money? Premium Exercise? Profit Return ABC Call 10 $10.26 in the money 0.86 Yes ABC Put 10 $10.26 Out of the money 9.71 ABC Call 25 $23.93 Out of the money 0.81 . ABC Put 25 $23.93 in the money 2.01 . No NO Yes . b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. Company Option Strike Today's Stock In/Out of the Price Money? Premium Exercise? Profit Return ABC Call 10 $11.23 In the money 0.86 Yes ABC Put 10 $11.23 Out of the money 0.71 No ABC Call 25 $27.00 In the money 0.81 ABC Put 25 $27.00 Out of the money 2.01 Yes No
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
