Question: You write a call option on a stock for a premium of $5. The exercise price is $1. What is the options profit or loss

You write a call option on a stock for a premium of $5. The exercise price is $1. What is the options profit or loss if just prior to expiration the stock price is $12?

a. $11

b. $5

c. ($6)

d. $0

e. $6

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!

1. You buy a call option on a stock for a premium of $1.00. The exercise price is $31.50. What is the options profit or loss if just prior to expiration the stock price is $30.50? a. $0.50 b. $1.00...

Which of the following values comes closest to the payback of a project that requires an initial investment of $34, produces cash flows of $12 for 5 consecutive years beginning at the end of year 1,...

You write a call option on a stock for a premium of $5. The exercise price is $1. What is the option's profit or loss if just prior to expiration the stock price is $12? a. $0 b. ($6) c. $6 d. $11 e....

QUESTION 20 ooo ooo You write a call option on a stock for a premium of $5. The exercise price is $11. What is the option's profit or loss if just prior to expiration the stock price is $16? a. $11...

You write a call option on a stock for a premium of $5 . The exercise price is $11 . What is the option's profit or loss if just prior to expiration the stock price is $6 ? A. (56 ) B . SO C. $5 D....

a. You write a put option on a stock for a premium of $0.25. The exercise price is $100. What is the option's profit or loss if just prior to expiration the stock price is $101? b. Suppose that you...

UNTUI 5.0. The exercise price is $32.50. What is the option's profit or loss ifjust prior to expiration the stories Select one: a $5.00 b. $2.50 c. $0.00 d. ($5.00) e. ($2.50) You write a call option...

You write a call option on a stock for a premium of $6. The exercise price is $11. What is the options profit or loss if just prior to expiration the stock price is $6? a. $5 b. $0 c. ($6) d. $6 e....

You write a call option on a stock for a premium of $1.00. The exercise price is $11.75. What is the option's profit or loss if just prior to expiration the stock price is $11.25? a. $0.00 b. $1.00...

On August 31, 2014, Daisy Floral Supply had a $ 155,000 debit balance in Accounts Receivable and a $ 6,200 credit balance in Allowance for Bad Debts. During September, Daisy made Sales on account, $...

What is Mutex? How it can solve Producer Consumer problem? Mutex

you are considering purchasing shares in a company that has an expected return of that stock of 1 4 . 3 %

SIMAD UNIVERSITY Class: BACC25 Subject: Islamic Accounting Instructions: a) Follow The Instructions. Midterm Exam Instructor: All Ibrahim Date: 6-4-2022 b) You Have 1.5 Hrs. To Complete This Test. c)...

(Appendices) Permanent partial workers compensation claims are costly and often difficult to administer. The states use different methods to compensate injured workers for such claims. LO4 a. What is...

(Appendices) Compare the SSI program with the TANF program with respect to each of the following: LO4 a. Eligibility requirements b. Groups that are covered c. Benefits provided d. Financing

(Appendices) The Original Medicare Plan consists of Hospital Insurance (Part A) and Medical Insurance (Part B). For each of the following losses, indicate whether the loss is covered under Medicare....