Question: You write one Apple December 140 call contract on the CBOE for a premium of $4. You hold the option until the expiration date, when

You write one Apple December 140 call contract on the CBOE

You write one Apple December 140 call contract on the CBOE for a premium of $4. You hold the option until the expiration date, when Apple stock sells for \$141 per share. You will realize a on the investment. $200 profit $400 loss $300 profit $200 loss $100 gain

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!

You purchase one Apple December 140 call contract on the CBOE for a premium of $5. You hold the option until the expiration date, when Apple stock sells for \$147 per share. You will realize a on the...

You purchase one Apple December 140 put contract on the CBOE for a premium of $3. You hold the option until the expiration date, when Apple stock sells for $143 per share. You will realize a on the...

Answer the following independent questions. No points are given without showing calculation steps or giving detailed explanation. Assume the Put Call Parity holds and use continuous compounding where...

i) A put on Ranors stock with a strike price of $35 is priced at $2 per share, while a call with a strike price of $35 is priced at $3.50. Calculate the maximum per- share loss to the writer of an...

* Show all step of calculation and detail Assume the Put Call Parity holds and use continuous compounding where applicable; i.e. PV(X) = Xe -rt , where r is the risk-free rate and t is in years. i) A...

7. The risk-free rate is 4%. The expected market rate of return is 11%. If you expect stock X with a beta of.8 tooffer arate ofretum of 12 percent, then you should A. buy stock X because it is...

You write one ABC August 85 call contract for a premium of $3.97. The option is held until the expiration date, when ABC stock sells for $88 per share. What is your total profit on this investment?...

Question 5(1 point) You write one MBI July 120 call contract (equaling 100 shares) for a premium of $4. You hold the option until the expiration date, when MBI stock sells for $135 per share. You...

You buy one ABC December 120 call contract for a premium of $4. You hold the option until the expiration date when ABC stock sells for $122 per share. You will realize a on the investment. Note that...

age 26 of 29 Question 26 (1 point) You buy one ABC December 120 call contract for a premium of $4. You hold the option until the expiration date when ABC stock sells for $122 per share. You will...

Ahorita Company manufactures wireless transponders for satellite applications. Ahorita has recently acquired Zelltech Company, which is primarily known for its software communications development but...

Mr Peterson postponed buying a car by another year. By then the average inflation rate was 6,4% per annum. 6.1 Define the term inflation. 6.2 6.3 Calculate the price of the car if the price increase...

A client recently purchased a new home from a builder for $ 1 5 0 , 0 0 0 , including the lot valued at $ 4 0 , 0 0 0 . How much insurance would you recommend that your client purchase to cover full...

Knowledge is neutral. True or False?

3.39 A local public-action group solicits donations by telephone. For a particular list of prospects it was estimated that for any individual the probability was 0.05 of an immediate donation by...

3.36 A mutual fund company has 6 funds that invest in the U.S. market and 4 that invest in international markets. A customer wants to invest in two U.S. funds and 2 international funds. a. How many...

3.38 A video movie store owner finds that 30% of the customers entering the store ask an assistant for help and that 20% of the customers make a purchase before leaving. It is also found that 15% of...