Question: You write one IBM July 121 call contract for a premium of $3. You hold the option until the expiration date, when IBM stock sells

You write one IBM July 121 call contract for a premium of $3. You hold the option until the expiration date, when IBM stock sells for $123 per share. You will realize a ______ on the investment.

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!

Question 106 points) You write one IBM July 160 call contract for a premium of $3. You hold the option until the expiration date when IBM stock sells for $161 per share. You will realize a per...

Please answer by 9:30 pm ET You write one IBM July 129 call contract for a premium of $3. You hold the option until the expiration date, when IBM stock sells for $130 per share. You will realize a on...

The last exam will cover these 3 tests plus a few small quizzes. The attached should give you a good idea of the material. Let me know if you have any questions. You can see which I got correct with...

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...

B. 2,140,000 C. 1,910,000 D. 1,960,000 E. one of the above 5. Which one of the following statements regarding employee stock options (ESOs) is correct? . ESOs grant an employee the right to buy a...

Please help me explain those answer. 4. You write one IBM July 120 call contract for a premium of S4. You hold the option until the expiration date when IBM stock sells for $121 per share. You will...

You write one IBM July 120 call contract for a premium of $4. you hold the option until expiration date, when IBM stock sells for $121 per share. You will realize a ___________________ on the...

1.Use the following data to answer Question 1. 27 What must cash flow from financing have been in 2008 for Interceptors, Inc.? A) $5 B) $28 C) $30 D) $0 E) $33 30 2. You write one IBM July 120 call...

You write one IBM July 120 call contract for a premium of $4. You hold the option until the expiration date when IBM stock sells for $123 per share. What will be your realized profit/loss on the...

What is the market segmentation process?

Find the Lagrange interpolation polynomial for Xo = 1 f (xo) = 2 f(x1) = 5 X1 = 2 Answer: f(x) = [a] x + [b]

Assume that Juanita is indifferent between investing in a corporate bond that pays 8 . 2 0 percent interest and a stock with no growth potential that pays a 6 . 2 0 percent dividend yield. Assume...

Toyota Corporation manufactures numerous products, one of which is called P90. The company has provided the following data about this product: Unit sales (a) Selling price per unit Variable cost per...