Exam 17: Options Amcq Corporate Finance

The $17.50 put option on ALF stock is priced at $.75.What is the total intrinsic value of one option contract if the underlying stock is currently selling for $18 a share?

Eduardo owns an option that gives him the right to purchase shares of ABC stock at a price of $18 a share.Currently,the stock is selling for $21.60.He would like to profit on this stock but is not permitted to exercise his option for another 2 weeks.Contrary to other investors,he believes the stock price will decline significantly over the next 2 weeks.Given this situation,he should

Rita owns six put option contracts on Farmington stock with an exercise price of $27.50.What is the total intrinsic value of these contracts if the stock is currently selling for $26.98 a share?

British Imports has a stock price of $38.62 a share.The $35 put is priced at $.15.The intrinsic value of the put is ________,and the time value is ________.

The lower bound on a call's value is the:

A stock is currently priced at $53.80 a share.One year from now,the stock price is expected to be either $54 or $59 a share.The risk-free rate of return is 2 percent.What is the value of a 1-year call option with an exercise price of $55?

Which one of these combinations is a protective put?

The difference between an American call and a European call is that the American call

The ticker symbol for a stock option indicates all of the following except the

The Bakery's assets are currently valued at $2,306.These assets are expected to be worth either $2,100 or $2,600 one year from now.The company has a pure discount bond outstanding with a $2,500 face value and a maturity date of 1 year.The risk-free rate is 2.6 percent.What is the value of the equity in this firm?

Assume you own both a June 20 put and a June 20 call on ALPO stock.Which one of the following statements is correct concerning your option positions? Ignore taxes and transaction costs.

You own stock in a firm that has a pure discount loan due in 6 months.The loan has a face value of $50,000.The assets of the firm are currently worth $62,000.The stockholders in this firm basically own a ________ option on the assets of the firm with a strike price of ________.

A stock has a market value of $36.10 a share.The $35 call option is priced at $1.48.The intrinsic value of this option is ________,and the time value is ________.

You purchased four TJH call option contracts with a strike price of $35 when the option was quoted at $.68.The option expires today when the value of TJH stock is $36.90.Ignoring trading costs and taxes,what is your total profit or loss on your investment?

The seller of a call option makes the most profit when the option

Ed's Sheds has a $1,250 pure discount bond that comes due in 1 year.The risk-free rate of return is 3.1 percent.The firm's assets are expected to be worth either $1,100 or $1,500 in 1 year.Currently,these assets are worth $1,360.What is the current value of the firm's debt?

Which term applies to the purchase or sale of an underlying asset via an option contract?

The value of an option if it were to immediately expire is called the option's ________ value.

You wrote six put option contracts on Bakers Field stock with an exercise price of $30 and an option price of $2.20.The stock price was $31.20 a share on the option expiration date.Ignoring trading costs and taxes,what is your total net profit or loss on this investment?

The Whistle Stop has a stock price of $17 a share.One-year options have a strike price of $20.The risk-free rate is 2.8 percent,the standard deviation is 29 percent,N(d₁)is 0.37492 and N(d₂)is 0.27131.What is the call price?