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Problem 24-3 Calculating Payoffs [LO1] Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $39. Calls Puts Option Expiration Strike Price Volume Last Volume Last Macrosoft February 41 97 1.43 52 2.43 March 41 73 1.67 34 2.84 May 41 34 1.95 23 3.26 August 41 15 2.16 15 3.30 

          Problem 24-3 Calculating Payoffs [LO1]
Use the option quote information shown here to answer the questions that follow. The
stock is currently selling for $39.
Calls
Puts
Option Expiration Strike Price Volume Last Volume Last
Macrosoft February 41 97 1.43 52 2.43
March 41 73 1.67 34 2.84
May 41 34 1.95 23 3.26
August 41 15 2.16 15 3.30
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Problem 24-3 Calculating Payoffs [LO1] Use the option quote information shown here to answer the questions that follow. The stock is currently selling for 39. Calls Puts Option Expiration Strike Price Volume Last Volume Last Macrosoft February 41 97 1.43 52 2.43 March 41 73 1.67 34 2.84 May 41 34 1.95 23 3.26 August 41 15 2.16 15 3.30

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Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
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Suppose you buy 22 contracts of the August 41 put option. c-1. What is your maximum gain? c-2. On the expiration date, Macrosoft is selling for $35 per share. How much is your options investment worth? c-3. On the expiration date, Macrosoft is selling for $35 per share. What is your net gain? Suppose you sell 22 of the August 41 put contracts. d-1. What is your net gain or loss if Macrosoft is selling for $36 at expiration? (Enter your answer as a positive value.) d-2. What is your net gain or loss if Macrosoft is selling For $43 at expiration? (Enter your answer as a positive value.) d-3. What is the break-even stock price? (Round your answer to 2 decimal places, e.g., 32.16.) Problem 24-3 Calculating Payoffs [LO1 Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $39 Calls Puts Option Macrosoft Expiration February March May August Strike Price Volume 41 97 41 73 41 34 41 15 Last 1.43 1.67 1.95 2.16 Volume 52 34 23 15 Last 2.43 2.84 3.26 3.30
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Homework Assignment - Stock Options Calls Puts Strike Close Price Expiration Vol. Last Vol. Last Hendricks 103 100 Feb 72 5.20 50 2.40 103 100 Mar 41 8.40 29 4.90 103 100 Apr 16 10.68 10 6.60 103 100 Jul 8 14.30 2 10.10 Suppose you buy 50 February 100 put option contracts. What is your maximum gain? On the expiration date, Hendricks is selling for $87.45 per share. How much is your options investment worth? What is your net gain? A call option is currently selling for $5.30. It has a strike price of $60 and six months to maturity. A put option with the same strike price sells for $7.80. The risk-free rate is 4.3 percent, and the stock will pay a dividend of $2.80 in three months. What is the current stock price? Suppose you buy one SPX call option contract with a strike of 1,300. At maturity, the S&P 500 Index is at 1,321. What is your net gain or loss if the premium you paid was $14?

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An option to buy a stock is priced at $200. If the stock closes above 30 on May 15, the option will be worth $500. If it closes below 20, the option will be worth nothing; and if it closes between 20 and 30 (inclusively), the option will be worth $200. A trader thinks there is a 50% chance that the stock will close in the 20-30 range, 40% chance that it will close above 30, and a 10% chance that it will fall below 20 on May 15. Complete parts a) through (c). a) How much does she expect to gain? (Round to the nearest dollar as needed.) b) What is the standard deviation of her gain? (Round to the nearest dollar as needed.) c) Should she buy the stock option? Discuss the pros and cons in terms of your answers to (a) and (b). The expected gain is (1) ______ which means the trader can expect (2) ______. The standard deviation is (3) ______ than the expected gain. That means a net loss is (4) ______. The trader should balance the risk of a net loss against her tolerance for loss to make the decision. (1) negative, positive, (2) a net gain. a net loss. (3) much smaller larger smaller (4) almost impossible. a real possibility. nearly certain.

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00:01 Hello students, let us solve the problem here.
00:02 We need to calculate in this problem the maximum gain what is the investment worth and the net gain? so these three things we are going to calculate in this problem so first we'll solve option of investment worth that is option of investment worth it is 50 into 4 .90 which gives us 245 the payoff of put option in stock the payoff put option in stock expire on 87 .45 so therefore the max of 0 comma strike price minus stock price into 50 so that will be max of 0 comma 100 minus 87 .45 minus strike price will be sorry 87 .45 will be the strike price into 50...
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