Both a call and a put currently are traded on stock XYZ; both have strike prices...

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Finance

Both a call and a put currently are traded on stock XYZ; bothhave strike prices of $50 and expirations of 6 months.

a. What will be the profit to an investor who buysthe call for $4.8 in the following scenarios for stock prices in 6months? (i) $40; (ii) $45; (iii) $50; (iv) $55; (v) $60.(Leave no cells blank - be certain to enter "0" whereverrequired. Negative amounts should be indicated by a minus sign.Round your answers to 1 decimal place.)
b. What will be the profit to an investor whobuys the put for $7.5 in the following scenarios for stock pricesin 6 months? (i) $40; (ii) $45; (iii) $50; (iv) $55; (v) $60.(Leave no cells blank - be certain to enter "0" whereverrequired. Negative amounts should be indicated by a minussign. Round your ans

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3.5 Ratings (277 Votes)

a Both call and put have strike price os 50 i Loss of 48 as the stock price is below the strike price as a result the call option will not be exercised The See Answer

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Both a call and a put currently are traded on stock XYZ; bothhave strike prices of $50 and expirations of 6 months.a. What will be the profit to an investor who buysthe call for $4.8 in the following scenarios for stock prices in 6months? (i) $40; (ii) $45; (iii) $50; (iv) $55; (v) $60.(Leave no cells blank - be certain to enter "0" whereverrequired. Negative amounts should be indicated by a minus sign.Round your answers to 1 decimal place.)b. What will be the profit to an investor whobuys the put for $7.5 in the following scenarios for stock pricesin 6 months? (i) $40; (ii) $45; (iii) $50; (iv) $55; (v) $60.(Leave no cells blank - be certain to enter "0" whereverrequired. Negative amounts should be indicated by a minussign. Round your ans