You purchase one jnj 75 call option for a premium of

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International Financial Management
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Chapter 5 / Exercise 1
International Financial Management
Madura
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56. You purchase one JNJ 75 call option for a premium of $3. Ignoring transaction costs, the break-even price of the position is A. $75B. $72C. $3D.$78E. none of the above+75 + $3 = $78.
Difficulty: Easy57. You write one AT&T February 50 put for a premium of $5. Ignoring transactions costs, what is the breakeven price of this position?
Difficulty: Easy58. You purchase one IBM 70 call option for a premium of $6. Ignoring transaction costs, the break-even price of the position is
Difficulty: Easy20-33
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International Financial Management
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Chapter 5 / Exercise 1
International Financial Management
Madura
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59. Call options on IBM listed stock options are
Difficulty: Moderate60. Buyers of call options __________ required to post margin deposits and sellers of put options __________ required to post margin deposits. A. are; are notB. are; areC.are not; areD. are not; are notE. are always; are sometimesBuyers of call options pose no risk as they have no commitment. If the option expires worthless, the buyer merely loses the option premium. If the option is in the money at expiration and the buyer lacks funds, there is no requirement to exercise. The seller of a put option is committed to selling the stock at the exercise price. If the seller of the option does not own the underlying stock the seller must go into the open market and buy the stock in order to be able to sell the stock to the buyer of the contract.
Difficulty: Moderate
Chapter 20 - Options Markets: Introduction61. Buyers of put options anticipate the value of the underlying asset will __________ and sellers of call options anticipate the value of the underlying asset will ________.
Difficulty: Moderate62. The Option Clearing Corporation is owned by
Difficulty: Moderate20-35

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