Question: You purchased two (2) put option contracts on AAA stock with a strike price of $50 and an option price of $1.20. The option expires

You purchased two (2) put option contracts on AAA stock with a strike price of $50 and an option price of $1.20. The option expires today when the value of WXX stock is $45. Ignoring trading costs and taxes, what is your total profit on your investment?

$1,000

$760

-$240

You purchased three (3) put option contracts on BBB stock with a strike price of $60 and an option price of $0.60. The option expires today when the value of WXX stock is $48.10. Ignoring trading costs and taxes, what is your total profit on your investment?

$3,390

$3,570

-$180

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

We continue our study of term life insurance demand from Chapters 3 and 4. Specifically, we examine the 2004 Survey of Consumer Finances (SCF), a nationally representative sample that contains...

Question #35 (5 points) Suppose Catherine recently purchased two long call option contracts on a stock with a strike price of $50. In addition, she also purchased two long put option contracts on the...

Question 26 You purchased five (5) put option contracts on CCC stock with a strike price of $30 and an option price of $0.60. The option expires today when the value of WXX stock is $29.5. Ignoring...

Question 27 3 pts You purchased three (3) put option contracts on BBB stock with a strike price of $60 and an option price of $0.60. The option expires today when the value of WXX stock is $48.10....

Use these option quotes to answer the questions 30 and 31. AA Company Price 35 20 Calls Strike Symbol Last Chg Bad Ask Vol Open Int 2750 AAEY 770 to 28 770 780 2 289 30.00 AAEF 5.20 10.36 5.20 5.30...

16. The price of a stock is $67. A trader sells 5 put option contracts on the stock with a strike price of $70 when the option price is $4. The options are exercised when the stock price is $69. What...

i) Which of the following describes a call option? A) The right to buy an asset for a certain price B) The obligation to buy an asset for a certain price C) The right to sell an asset for a certain...

Three months ago, you purchased three put option contracts on WXX stock with a strike price of $60 and an option price of $.50. The option expires today when the value of WXX stock is $52.40....

please i need an answer ASAP. THANKS Mini Case Assume that you have just been hired as a financial analyst by Triple Trice Inc., a mid-sized California company that specializes in creating exotic...

Left:0:21:47 uupumuuS LUCRDown Browser + Webcam Falone Milemba Mbala: Attempt 1 uestion 50 (1 pomi) MST is currently selling for $170 and an American call option is available for $30. What should be...

As has been played out since its inception, the use of the Patriot Act has been controversial on many levels, yet it has also proved to be a useful tool in fighting terrorism and preventing another...

1. Demand is ____on the upper portion of a linear demand curve and ____on the lower portion of a linear demand curve. 2. Suppose we are on the upper portion of a linear demand curve. If the price...

Conventional thinking is that the incentive effects of budgeting systems are enhanced by Blank _ _ _ _ _ _ . Multiple choice question. having top management formulate most budgets. allowing employees...

Liz and John formed the equal LJ Partnership on January 1 of the current year. Liz contributed $80,000 of cash and land with a fair market value of $90,000 and an adjusted basis of $75,000. John...

The next dividend payment by Blue Cheese, Inc., will be $1.89 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. If the stock currently sells for $38 per share,...

The following is the shareholders' equity section of Suozzi sCorp. at December 31, 2014: Preferred shares,a authorized 100,000 shares; issued 25,000 shares .............. $ 750,000 Common shares...

Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual circumstances during the year, the board raises, lowers, or maintains the current...

Calculating the Direct Materials Mix Variance Mangia Pizza Company makes frozen pizzas that are sold through grocery stores. Mangia developed the following standard mix for spreading on premade pizza...

8. Modified rebuy is a purchase decision that requires some research where the buyer wants to modify the product specification, price, terms, or suppliers. (CLO-2) Select one: True False 9. Companies...

Mortality rate

Armed conflicts.

Take responsibility for the other persons or others experience of the situation.