Suppose you buy 5 European call option contracts (100 shares each) in a stock that is trading

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Suppose you buy 5 European call option contracts (100 shares each) in a stock that is trading at $72, with strike price of $80. The ask price is $3 per share. Ignore broker’s commission fees and taxes. Show your calculations.

a) If the price at maturity is $75, what is your profit or loss? (2 points)

b) If the price at maturity is $82, what is your profit or loss? (2 points)

c) If the price at maturity is $89, what is your profit or loss? (2 points)

Related Book For answer-question

Financial Markets and Institutions

ISBN: 978-0077861667

6th edition

Authors: Anthony Saunders, Marcia Cornett

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Posted Date: May 11, 2023 06:12 AM

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Suppose you buy 5 European call option contracts (100 shares each) in a stock that is trading

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The total cost of buying 5 European call option contracts at 3 per share is 3 per share x 100 shares ... View the full answer

Financial Markets and Institutions

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