Examlex

Solved

The Following Prices Are Available for Call and Put Options

question 36

Short Answer

The following prices are available for call and put options on a stock priced at $50.The risk-free rate is 6 percent and the volatility is 0.35.The March options have 90 days remaining and the June options have 180 days remaining.The Black-Scholes model was used to obtain the prices.
The following prices are available for call and put options on a stock priced at $50.The risk-free rate is 6 percent and the volatility is 0.35.The March options have 90 days remaining and the June options have 180 days remaining.The Black-Scholes model was used to obtain the prices.    Use this information to answer questions 1 through 20.Assume that each transaction consists of one contract (for 100 shares)unless otherwise indicated. For questions 1 through 6,consider a bull money spread using the March 45/50 calls. -What is the breakeven point? A)$48.02 A)none of the above B)$41.98 C)$55.66 D)$50.00 Use this information to answer questions 1 through 20.Assume that each transaction consists of one contract (for 100 shares)unless otherwise indicated.
For questions 1 through 6,consider a bull money spread using the March 45/50 calls.
-What is the breakeven point?
A)$48.02
A)none of the above
B)$41.98
C)$55.66
D)$50.00


Definitions:

Clear View

A term denoting an unobstructed and clear line of sight or understanding.

Proper Objective

An aim or goal that is suitable and appropriately targeted for a specific task or endeavor.

Optical Microscopes

Instruments that use visible light and a system of lenses to magnify small objects, allowing for the observation of details not visible to the naked eye.

Physicians' Office Laboratories

Labs located within a physician's office where various tests are performed on clinical specimens to obtain information about the health of a patient.

Related Questions