Kimberback Exporters Incorporated Date Price 1/15/2022 $150.00 2/15/2022 $152.50 3/15/2022 $157.60 4/15/2022 $155.64 5/15/2022 $156.50 Option Expiration
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Question:
Kimberback Exporters Incorporated | |||||
Date | Price | ||||
1/15/2022 | $150.00 | ||||
2/15/2022 | $152.50 | ||||
3/15/2022 | $157.60 | ||||
4/15/2022 | $155.64 | ||||
5/15/2022 | $156.50 | ||||
Option | Expiration Date | Strike Price | Call Price | Binary Option Payoff | |
Asian Option | 6/15/2022 | $150 | $3.62 | ||
Binary Option | 6/15/2022 | $150 | $3.75 | $10 | |
Required: | |||||
Using the information in the table above, please calculate dollar value of the following exotic option strategies. The Asian option uses prices from the final three months. The Binary Option pays out if the final price exceeds the strike price. Once each payoff is calculated, use it to determine the profit of each strategy at various stock prices. | |||||
Kimberback Exporters Incorporated | Stock Price at Expiration | ||||
Strategy | $135.00 | $145.00 | $150.00 | $155.00 | $160.00 |
Asian Option | |||||
Binary Option | |||||
Kimberback Exporters Incorporated | Rate of Return as a Function of Current Stock Price | ||||
Asian Option | |||||
Binary Option | |||||
Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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