a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. (Enter "O" if there is no profit or return from not exercising the option. Round your answer to 2 decimal places.) Company Option Today's Stock In/Out of the Strike Price . Money? (Click to select) Premium Exercise? Profit Return ABC Call 10 $10.26 1.06 (Click to select) v v ABC Put 10 $10.26 0.91 (Click to select) v (Click to select) АВС Call 25 $23.93 1.01 (Click to select) v АВС Put 25 $23.93 In the money 2.21 (Click to select) v Out of the money b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. Today's Stock Price In/Out of the Company Option Strike Exercise? Profit Return Money? (Click to select) Premium 1.06 (Click to select) v АВС Call 10 $11.23 10 $11.23 (Click to select) v 0.91 (Click to select) v ABC Put $27.00 (Click to select) 1.01 (Click to select) v ABC Call 25 $27.00 (Click to select) 2.21 (Click to select) v АВС Put 25 < Prev 8 of 12 Next >
a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. (Enter "O" if there is no profit or return from not exercising the option. Round your answer to 2 decimal places.) Company Option Today's Stock In/Out of the Strike Price . Money? (Click to select) Premium Exercise? Profit Return ABC Call 10 $10.26 1.06 (Click to select) v v ABC Put 10 $10.26 0.91 (Click to select) v (Click to select) АВС Call 25 $23.93 1.01 (Click to select) v АВС Put 25 $23.93 In the money 2.21 (Click to select) v Out of the money b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. Today's Stock Price In/Out of the Company Option Strike Exercise? Profit Return Money? (Click to select) Premium 1.06 (Click to select) v АВС Call 10 $11.23 10 $11.23 (Click to select) v 0.91 (Click to select) v ABC Put $27.00 (Click to select) 1.01 (Click to select) v ABC Call 25 $27.00 (Click to select) 2.21 (Click to select) v АВС Put 25 < Prev 8 of 12 Next >
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out
of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and
what the percentage return would be. (Enter "O" if there is no profit or return from not exercising the option. Round your answer to
2 decimal places.)
Today's Stock
In/Out of the
Company
Option
Strike
Price
Money?
(Click to select)
Premium
Exercise?
Profit
Return
eBook
АВС
Call
10
$10.26
1.06
(Click to select) v
АВС
Put
10
$10.26
0.91
(Click to select) v
Print
(Click to select)
ABC
Call
25
$23.93
1.01
(Click to select) v
АВС
Put
25
$23.93
In the money
(Click to select) v
eferences
2.21
Out of the money
b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers
to part a.
In/Out of the
Money?
(Click to select)
Today's Stock
Company
Option
Strike
Premium
Exercise?
Profit
Return
Price
(Click to select) v
(Click to select) v
(Click to select)
АВС
Call
10
$11.23
1.06
АВС
Put
10
$11.23
(Click to select)
0.91
Call
25
$27.00
(Click to select)
1.01
ABC
25
$27.00
(Click to select)
2.21
(Click to select) v
АВС
Put
< Prev
8 of 12
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