North South FIN 433 - Practice Questions on Ch 14
Course Fin 433-
Pages 1

Unformatted text preview:

Practice Questions on Ch 14:Make sure you identify the maximum loss, maximum gain and break-even stock price for the position or positions! Problem 1. Draw the profit-loss diagram of the following option position:a) S0 (Spot price now) = \$55, K (Strike Price) = \$61, t = 6 month, Long call, C0 = \$3b) S0 (Spot price now) = \$55, K (Strike Price) = \$55, t = 6 month, Long call, C0 = \$4c) S0 (Spot price now) = \$55, K (Strike Price) = \$50, t = 6 month, Long call, C0 = \$9Problem 2. Draw the profit-loss diagram of the following option position:a) S0 (Spot price now) = \$55, K (Strike Price) = \$50, t = 6 month, Long put, P0 = \$2.50b) S0 (Spot price now) = \$55, K (Strike Price) = \$55, t = 6 month, Long put, P0 = \$4c) S0 (Spot price now) = \$55, K (Strike Price) = \$60, t = 6 month, Long put, P0 = \$6Problem 3. Draw the profit-loss diagram of the following positions on Apple Stock:Own stock at S0 (Spot price now) = \$178 and buying the following put withK (Strike Price) = \$165, t = 2 month, P = \$5Problem 4. Draw the profit-loss diagram of the following positions on Apple Stock:Own stock at S0 (Spot price now) = \$178 and buying the following put with K (Strike Price) = \$185, t = 2 month, P = \$14Problem 5. Draw the profit-loss diagram of the following positions on Apple Stock:Own stock at S0 (Spot price now) = \$178, and selling the following call withK (Strike Price) = \$200, t = 2 month, C = \$3.50Problem 6. Draw the profit-loss diagram of the following positions on Apple Stock:Own stock at S0 (Spot price now) = \$178, and selling the following call withK (Strike Price) = \$170, t = 2 month, C = \$16This study source was downloaded by 100000850782574 from CourseHero.com on 09-03-2022 16:44:57 GMT -05:00https://www.coursehero.com/file/95328471/Practice-Questions-on-Ch14-Optionsdocx/Powered by TCPDF

View Full Document

# North South FIN 433 - Practice Questions on Ch 14

Course: Fin 433-
Pages: 1 Unlocking...