DEVRY FIN 516 Entire Course NEW DEVRY FIN 516 Week 3 Homework

DEVRY FIN 516 Week 3 Homework

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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 ?