ch16option_example_i

ch16option_example_i - Chapter 16 Text Example Comparison...

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Chapter 16 Text Example Comparison of Options, Equity and Combined Bills and Options Basic Data for Spreadsheet Current Stock Price $80 Options Price $10 Exercise Price $80 Ending Stock Price T-Bill Rate Annual 4% Ending Stock Price $95 Ending Value Per Option $15 Option 75 80 85 90 95 100 Investment Amount $8,000 Total Ending Value $12,000 0 0 4000 8000 12000 16000 Options Only Strategy Options Purchased 800 Ending Value per Option $15 Stock 75 80 85 90 95 100 Total Ending Value $12,000 Total Ending Value $9,500 7500 8000 8500 9000 9500 10000 Total Profit $4,000 Return on Investment 50.00% Stock Only Strategy 75 80 85 90 95 100 Shares Purchased 100 Total Ending Value $8,640 7140 7140 7640 8140 8640 9140 Total Ending Value $9,500 Total Profit $1,500 Return on Investment 18.75% Option 75 80 85 90 95 100 Bills and Options Strategy Return 50% -100.00% -100.00% -50.00% 0.00% 50.00% 100.00% Number of Options Purchased 100 Investment in Options $1,000 Invesment in Bills $7,000 Ending Value of the Options
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This note was uploaded on 10/28/2009 for the course MBA MBA608 taught by Professor Martin during the Spring '09 term at Beirut Arab University.

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ch16option_example_i - Chapter 16 Text Example Comparison...

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