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Juan is considering the following alternatives for investing in MM Industries:Buy500sharesBuy six month call options with:exercise price of$46for a...
- Juan is considering the following alternatives for investing in MM Industries:Buy500sharesBuy six month call options with:exercise price of$46for a premium of$4.00The selling price per share now$45Assume no commissions o taxes (ideal world)Assume in4monthsthe stock reaches$50and a call was purchasedWhat is the annualized percentage gain?Selected Answer:3. 100%
- 0 out of 2 points
- A stock currently trades for$110January call options with a strike of$100sell for$15January put options a strike price of$100sell for$5Estimate the price of a risk free bondSelected Answer:4. between $103 and $105
- 0 out of 2 points
- Juana bought a 6-month XX put option withan exercise price of$50for a premium of$8when XX share was selling for$48Assumeat expiration XX is selling for$42What is Juana's dollar gain or loss?Selected Answer:1. $200
- 0 out of 2 points
- Juana bought a 6-month XX put option withan exercise price of$50for a premium of$8when XX share was selling for$48Assumeat expiration XX is selling for$42What is Juana's annualized gain or loss?Selected Answer:2. 200%
- 2 out of 2 points
- A stock currently trades for$26January call options with a strike of$28sell for$6The appropriate risk free bond has a price of$28What is the January put option
