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Question
given the following information,
price of a stock $39
strike price of a six-month call $35
market price of the call $8
strike price of a six-month put $40
market price of the put $3
finish the following sentences.
a. the intrinsic value of the call is _________.
b. the intrinsic value of the put is _________.
c. the time premium paid for the call is _________.
d. the time premium paid for the put is _________.
at the expiration of the options (i.e., after six months have lapsed), the price of the stock is $45.
e. the profit (loss) from buying the call is _______.
f. the profit (loss) from writing the call covered (i.e.,
buying the stock and selling the call) is ________.
g. the profit (loss) from buying the put is _______.
h. the profit (loss) from selling the stock short is ______.
i. the maximum possible loss from buying the put is ______.
j. at expiration, the time premium paid for a put or a
call is _______.
Answer
This answer is hidden. It contains 281 characters.
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