Question: Please help with d1, d2 and d3. Use the option quote information shown below to answer the questions that follow. The stock is currently selling
Please help with d1, d2 and d3.
Use the option quote information shown below to answer the questions that follow. The stock is currently selling for $40.
| Option and | Calls | Puts | |||||||||||||||
| NY Close | Expiration | Strike Price | Vol. | Last | Vol. | Last | |||||||||||
| Macrosoft | |||||||||||||||||
| February | 42 | 98 | 1.53 | 53 | 2.53 | ||||||||||||
| March | 42 | 74 | 1.77 | 35 | 2.94 | ||||||||||||
| May | 42 | 35 | 2.05 | 24 | 3.36 | ||||||||||||
| August | 42 | 16 | 2.26 | 16 | 3.40 | ||||||||||||
a. Suppose you buy 23 contracts of the February 42 call option. How much will you pay, ignoring commissions? (Do not round intermediate calculations.) Cost $ 3519 3519 Correct Suppose you buy 23 contracts of the February 42 call option and Macrosoft stock is selling for $43 per share on the expiration date. b-1. How much is your options investment worth? (Do not round intermediate calculations.) Payoff $ 2300 2300 Correct b-2. What if the terminal stock price is $42? (Do not round intermediate calculations.) Payoff $ 0 0 Correct Suppose you buy 23 contracts of the August 42 put option. c-1. What is your maximum potential gain? (Do not round intermediate calculations.) Maximum gain $ 88780 88780 Correct c-2. On the expiration date, Macrosoft is selling for $36 per share. How much is your options investment worth? (Do not round intermediate calculations.) Position value $ 13800 13800 Correct c-3. On the expiration date, Macrosoft is selling for $36 per share. What is your net gain? (Do not round intermediate calculations.) Net gain $ 5980 5980 Correct Suppose you sell 23 of the August 42 put contracts. d-1. What is your net gain or loss if Macrosoft is selling for $37 at expiration? (Input your answer as a positive value. Do not round intermediate calculations.) Loss Correct $ Not attempted d-2. What is your net gain or loss if Macrosoft is selling for $44 at expiration? (Input your answer as a positive value. Do not round intermediate calculations.) Gain Correct $ Not attempted d-3. What is the break-even price, that is, the terminal stock price that results in zero profit? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Break-even $
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