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Call Put Option Strike Exp. Vol. Last Vol. Last Cisco 15.00 Oct. 491 2.26 559 0.25 16.30 15.00 Nov. 259 2.90 154 1.00 16.30 17.50 Oct. 680 0.85 522 1.60 16.30 17.50 Nov. 142 1.33 40 2.31 16.30 17.50 Feb. 51 1.95 28 3.77 16.30 20.00 Oct. 828 0.30 915 4.05 16.30 20.00 Nov. 123 0.55 212 4.67 1. What is the cost to purchase one October 17.50 call contract on Cisco stock? A....

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Verified Solution

Question

Finance

Call Put

OptionStrikeExp.Vol.LastVol.Last
Cisco15.00Oct.4912.265590.25
16.3015.00Nov.2592.901541.00
16.3017.50Oct.6800.855221.60
16.3017.50Nov.1421.33402.31
16.3017.50Feb.511.95283.77
16.3020.00Oct.8280.309154.05
16.3020.00Nov.1230.552124.67

1. What is the cost to purchase one October 17.50 call contracton Cisco stock?

A. $290

B. $175

C. $85

D. $163

E. $680

2. What is the time value per share of the November 15 call?

A. $1.30

B. $1.40

C. $1.60

D. $1.90

E. $2.90

3. What is the time value per share of the November 15 put?

A. $0.00

B. $0.25

C. $1.00

D. $1.25

E. $1.30

4. Which of the options shown in the quote are in-the-money?

I. The October 15 call

II. The November 17.50 call

III. The October 15 put

IV. The November 20 put

A. I and II only

B. II and III only

C. I and IV only

D. III only

E. III and IV only

5. Suppose you bought 20 Cisco Oct 15 call contracts. Justbefore the option expires, the stock is selling for $18. What isyour net profit (or loss)? Ignore transaction costs.

A. -$4,520

B. -$2,260

C. $0

D. $1,480

E. $6,000

6. Suppose you bought 10 Cisco Oct 20 put contracts. Just beforethe option expires, the stock is selling for $19. What is your netprofit (or loss)? Ignore transaction costs.

A. -$4,050

B. -$3,050

C. -$1,000

D. $1,000

E. $3,700

Answer & Explanation Solved by verified expert
4.3 Ratings (921 Votes)
1 Oct 1750 call has a price of 085 so total price will be 085100 85 one contract is for 100 shares Option C 2 Option price intrinsic value time value Intrinsic value of a call asset price strike    See Answer
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Transcribed Image Text

Call PutOptionStrikeExp.Vol.LastVol.LastCisco15.00Oct.4912.265590.2516.3015.00Nov.2592.901541.0016.3017.50Oct.6800.855221.6016.3017.50Nov.1421.33402.3116.3017.50Feb.511.95283.7716.3020.00Oct.8280.309154.0516.3020.00Nov.1230.552124.671. What is the cost to purchase one October 17.50 call contracton Cisco stock?A. $290B. $175C. $85D. $163E. $6802. What is the time value per share of the November 15 call?A. $1.30B. $1.40C. $1.60D. $1.90E. $2.903. What is the time value per share of the November 15 put?A. $0.00B. $0.25C. $1.00D. $1.25E. $1.304. Which of the options shown in the quote are in-the-money?I. The October 15 callII. The November 17.50 callIII. The October 15 putIV. The November 20 putA. I and II onlyB. II and III onlyC. I and IV onlyD. III onlyE. III and IV only5. Suppose you bought 20 Cisco Oct 15 call contracts. Justbefore the option expires, the stock is selling for $18. What isyour net profit (or loss)? Ignore transaction costs.A. -$4,520B. -$2,260C. $0D. $1,480E. $6,0006. Suppose you bought 10 Cisco Oct 20 put contracts. Just beforethe option expires, the stock is selling for $19. What is your netprofit (or loss)? Ignore transaction costs.A. -$4,050B. -$3,050C. -$1,000D. $1,000E. $3,700

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