Required: a. You have just purchased the options listed below. Based on the information given, indicate...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Required: 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. Note: Enter "O" if there is no profit or return from not exercising the option. Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places. Company Option Strike Today's Stock Price In/Out of the Money? Premium Exercise? Profit Return ABC Call 10 $ 10.26 0.90 % ABC Put 10 $ 10.26 0.75 % ABC Call 25 ABC Put 25 SASA $ $ 23.93 23.93 0.85 2.05 di di % % 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 Price In/Out of the Money? Premium Exercise? Profit Return ABC Call 10.00 $ 11.23 0.90 ABC Put 10.00 $ 11.23 0.75 ABC Call 25.00 $ 27.00 0.85 ABC Put 25.00 $ 27.00 2.05 % do do do di % % % Required: 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. Note: Enter "O" if there is no profit or return from not exercising the option. Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places. Company Option Strike Today's Stock Price In/Out of the Money? Premium Exercise? Profit Return ABC Call 10 $ 10.26 0.90 % ABC Put 10 $ 10.26 0.75 % ABC Call 25 ABC Put 25 SASA $ $ 23.93 23.93 0.85 2.05 di di % % 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 Price In/Out of the Money? Premium Exercise? Profit Return ABC Call 10.00 $ 11.23 0.90 ABC Put 10.00 $ 11.23 0.75 ABC Call 25.00 $ 27.00 0.85 ABC Put 25.00 $ 27.00 2.05 % do do do di % % %
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Briar Company manufactures and sells dresses at a variable cost of $32 each and a fixed cost of x. It can sell 6,600 dresses at a selling price of $60 to earn an operating income of $14,800 (Option...
-
Cost allocation downward demand spiral Deli One operates a chain of 10 hospitals in the Los Angeles area. Its central food-catering facility, Deliman, prepares and delivers meals to the hospitals. It...
-
Burton Company should utilize all except one of the following concepts related to placing control numbers on business documents. Which concept should Burton not use? a. Write the control number on...
-
Why is it important for a general manager to take action?
-
Cheng Company traded a used truck for a new truck. The used truck cost $30,000 and has accumulated depreciation of $27,000. The new truck is worth $37,000. Cheng also made cash payment of $36,000....
-
Outside temperature over a day can be modeled as a sinusoidal function. Suppose you know the temperature is 50 degrees at midnight and the high and low.r temperature during the day are 63 and 3?...
-
Hi, I have a major assignment due in a week and I really need some help. They want us to configure/implement a network using cisco packet tracer and one of the first tasks is to figure out the IP...
-
How do cultural sensitivities and language preferences impact the effectiveness of our marketing communications in global markets? What role does influencer marketing play in our industry, and how...
-
How do cost accountant support strategic decision? How do management accountant support strategic decision? What is meant by business strategy? Name the three international certification available to...
-
Why do only 4 5 % of Americans take part in the political process OR VOTE?
-
Hazen Manufacturing, Inc. has a manufacturing machine that needs attention. (Click the icon to view additional information.) Hazen expects the following net cash inflows from the two options: (Click...
-
During the month of January, an employer incurred the following payroll taxes: FICA Social Security taxes of $260.40, FICA Medicare taxes of $60.90, FUTA taxes of $25.20, and SUTA taxes of $226.80....
-
Develop a 95% confidence interval for the mean of the most volatile of your components. Explain the importance of each item in the condidence interval formula. What does the interval tell you about...
-
Use the information given about the angles and to find the exact value of: (a) sin( + ) (b) cos( + ) (c) sin( - ) (d) tan ( + ) (e) sin(2) (f) cos (2) (g) sin /2 (h) cos/2 cos = 4/5, 0 < < /2; cos =...
-
You are a management accountant who provides financial planning advice to a range of individual and corporate clients. One of your clients, Mr Green, owns 1000 shares in Prospect plc, a mining...
-
FRS 8 - Related Party Disclosures - was issued in October 1995. Prior to its existence, there were specific requirements for related-party disclosures contained in the 1985 Companies Act and the...
-
Generally accepted accounting principles are: a. the guidelines used to resolve ethical dilemmas. b. established by the Internal Revenue Service. c. primarily established by the Financial Accounting...
Study smarter with the SolutionInn App