a. You have just purchased the options listedbelow. Based on the information given, indicate whether the optionis in the money, out of the money, or at the money, whether youwould exercise the option if it were expiring today, what thedollar profit would be, and what the percentage return would be.(Enter “0” if there is no profit or return from notexercising the option. Round your answer to 2 decimalplaces.)
| Company | Option | Strike | Today's Stock Price | Moneyness of the option? | Premium | Exercise? | Payoff (per Share) | Profit (per Share) | Return |
| ABC | Call | 49 | $51.06 | (Click to select)In the moneyOut of the money | 4.55 | (Click to select)NoYes | | | % |
| ABC | Put | 49 | $51.06 | (Click to select)Out of the moneyIn the money | 1.61 | (Click to select)NoYes | | | % |
| ABC | Call | 25 | $21.96 | (Click to select)In the moneyOut of the money | 0.76 | (Click to select)YesNo | | | % |
| ABC | Put | 25 | $21.96 | (Click to select)In the moneyOut of the money | 4.87 | (Click to select)YesNo | | | % |
|
b. Now suppose that time has passed and thestocks’ prices have changed as indicated in the table below.Recalculate your answers to part a.
| Company | Option | Strike | Today's Stock Price | Moneyness of the option? | Premium | Exercise? | Payoff (per Share) | Profit (per Share) | Return |
| ABC | Call | 18 | $19.86 | (Click to select)In the moneyOut of the money | 4.75 | (Click to select)YesNo | | | % |
| ABC | Put | 18 | $19.86 | (Click to select)Out of the moneyIn the money | 1.82 | (Click to select)NoYes | | | % |
| ABC | Call | 20 | $23.11 | (Click to select)In the moneyOut of the money | 4.08 | (Click to select)YesNo | | | % |
| ABC | Put | 20 | $23.11 | (Click to select)Out of the moneyIn the money | 1.62 | (Click to select)NoYes | | | % |
|
