Reference no: EM132068869
Refer to the stock options on Apple in the Figure 2.10. Suppose you buy an October expiration call option with exercise price $105.
APPLE [Underlying Stock Price = $101.05]
Expiration Strike Call Put
September 95 6.20 0.21
October 95 6.35 0.33
September 100 2.20 1.18
October 100 2.62 1.55
September 105 0.36 4.35
October 105 0.66 4.75
a-1. If the stock price in October is $106, will you exercise your call?
Yes
No
a-2. What is the net profit/loss on your position? (Negative amount should be indicated by a minus sign.)
(Click to select)Net lossNet profit $
a-3. What is the rate of return on your position? (Round your answer to 2 decimal places.)
Rate of return %
b-1. Would you exercise the call if you had bought the October call with the exercise price $95?
Yes
No
b-2. What is the net profit/loss on your position? (Input the amount as a positive value.)
(Click to select)Net lossNet profit $
b-3. What is the rate of return on your position? (Round your answer to 2 decimal places.)
Rate of return %
c-1. What if you had bought an October put with an exercise price of $105 instead? Would you exercise the put at a stock price of $105?
Yes
No
c-2. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %
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