The price of a stock is $35. A put option to sell that stock at $36 is currently selling for $3. You buy the stock and the put. Complete the following table and answer the questions. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if any. If the answer is zero, enter "0". Price of the stock Profit on stock Profit on put Net profit $22 $ $ $ 29 $ $ $ 36 $ $ $ 43 $ $ $ 50 $ $ $ 64 $ $ $ What is the maximum possible profit on the position? The maximum possible profit is . What is the maximum possible loss on the position? Enter your answer as a positive value. $ What is the range of stock prices that generates a profit? The position generates a profit as long as the price of the stock exceeds $ . What advantage does this position offer? Enter your answer as a positive value. Round your answer to the nearest dollar. The investor limits the to $ .
The price of a stock is $35. A put option to sell that stock at $36 is currently selling for $3. You buy the stock and the put. Complete the following table and answer the questions. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if any. If the answer is zero, enter "0". Price of the stock Profit on stock Profit on put Net profit $22 $ $ $ 29 $ $ $ 36 $ $ $ 43 $ $ $ 50 $ $ $ 64 $ $ $ What is the maximum possible profit on the position? The maximum possible profit is . What is the maximum possible loss on the position? Enter your answer as a positive value. $ What is the range of stock prices that generates a profit? The position generates a profit as long as the price of the stock exceeds $ . What advantage does this position offer? Enter your answer as a positive value. Round your answer to the nearest dollar. The investor limits the to $ .
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
The price of a stock is $35. A put option to sell that stock at $36 is currently selling for $3. You buy the stock and the put. Complete the following table and answer the questions. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if any. If the answer is zero, enter "0".
| Price of the stock | Profit on stock | Profit on put | Net profit | ||
| $22 | $ | $ | $ | ||
| 29 | $ | $ | $ | ||
| 36 | $ | $ | $ | ||
| 43 | $ | $ | $ | ||
| 50 | $ | $ | $ | ||
| 64 | $ | $ | $ |
- What is the maximum possible profit on the position?
The maximum possible profit is .
- What is the maximum possible loss on the position? Enter your answer as a positive value.
$
- What is the range of stock prices that generates a profit?
The position generates a profit as long as the price of the stock exceeds $ .
- What advantage does this position offer? Enter your answer as a positive value. Round your answer to the nearest dollar.
The investor limits the to $ .
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