DEVRY FIN 516 Week 3 Homework
Check this A + tutorial guideline at
http:// www. assignmentclick. com / fin- 516-new / fin-516-week-3-homework
For more classes visit http:// www. assignmentclick. com
FIN 516 Week 3 Homework Problem 20-6 on Call Options Based on Chapter 20
You own a call option on Intuit stock with a strike price of $ 40. The option will expire in exactly 3 months’ time.
a) If the stock is trading at $ 55 in 3 months, what will be the payoff of the call? b) If the stock is trading at $ 35 in 3 months, what will be the payoff of the call?
c) Draw a payoff diagram showing the value of the call at expiration as a function of the stock price at expiration.
Problem 20-8 on Put Options Based on Chapter 20
You own a put option on Ford stock with a strike price of $ 10. The option will expire in exactly 6 months’ time.
a) If the stock is trading at $ 8 in 6 months, what will be the payoff of the put? b) If the stock is trading at $ 23 in 6 months, what will be the payoff of the put?