Assume that a $50 strike put pays a 2.0% continuous dividend, r = 0.07, ? = 0.25, and the stock price is $48.00
What is the profit or loss, per share, for a short put position if the option expires in 60 days and the price rises to $50.00 after 5 days?
A) $1.05 loss
B) $1.05 gain
C) $1.12 gain
D) $1.12 loss
C
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When customers cannot discriminate among products, they consider the products to be similar, and the main determinant of which product is purchased is:
A) their quality. B) product recall. C) their USP. D) their relative price.
Consider the following projects, X and Y where the firm can only choose one. Project X costs $600 and has cash flows of $400 in each of the next 2 years
Project Y also costs $600, and generates cash flows of $500 and $275 for the next 2 years, respectively. Which investment should the firm choose if the cost of capital is 25 percent? A) Project X, since it has a higher NPV than Project Y B) Project Y, since it has a higher NPV than Project X C) neither, since both the projects have negative NPV D) neither, since both the projects have positive NPV