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Unformatted text preview: relevant features of the stocks and options may be assumed to be identical.) 18. Turn back at figure 2.9 and look at the Intel Option. Suppose you buy a November expiration call option with exercise price $21. a. Suppose the stock price in November is $21.75. Will you exercise your call? What is the profit on your position? b. What if you had bought a November call with exercise price $22? c. What if you had bought a November put with exercise price $22? 20. Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 and expirations of 6 months. What will be the profit to an investor who buys the call for $4 in the following scenarios for stock prices in 6 months? What will be the profit in each scenario to an investor who buys the put for $6? a. $40 b. $45 c.$50 d.$55 e. $60...
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This note was uploaded on 01/17/2012 for the course MGMT 141 taught by Professor Chernyshoff,n during the Fall '08 term at UC Irvine.
- Fall '08