Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you have purchased a put option on pfizer common s

You have purchased a put option on Pfizer common stock. The option has an exercise...

90.2K

Verified Solution

Question

Finance

You have purchased a put option on Pfizer common stock. The option has an exercise price of $49 and Pfizers stock currently trades at $51. The option premium is $0.40 per contract.

a. What is your net profit on the option if Pfizers stock price does not change over the life of the option? (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16)) Net profit $ per share

b. What is your net profit on the option if Pfizers stock price falls to $46 and you exercise the option? (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16)) Net profit $ per share

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Psychology
1.2K views

2. Discuss the essentialia of Lease Agreement . In support of your answers make reference to...

Accounting
1.2K views

Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The...

Physics
1.2K views

3 does not change 79 The graph between the angular momentum J and angular velocity...

Physics
1.2K views

One plate of a capacitor is connected to a spring as shown in figure Area...

Basic Math
1.2K views

Question 9 N Consider the following statements int p int i int k i 37...

Calculus
1.2K views

Question What is a b if a 3 4i and b 2 3i

Accounting
1.2K views

QUESTION TWO (20marks) Distinguish between a procedural audit and a balance sheet audit (8marks)...

Accounting
1.2K views

Speyer Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level...

Accounting
1.2K views

Tasman Products, Ltd., of Australia has a Maintenance Department that services the equipment in the...

Accounting
1.2K views

Lazy Guy Corporation manufactured 2,000 chairs during July. The following variable overhead data relates to...

Finance
1.2K views

32. A call option with a strike of $50 sells for $1.13. The underlying...

Finance
1.2K views

(CHAPTER 6) A 2-year project is under consideration. Here's what's known about its cash flows:...