Call Option Payoffs You purchase 25 call option contracts on Blue Ox stock. The strike price is $22, and the premium is $1. If the stock is selling for $24 per share at expiration, what are your call options worth? What is your net profit? What if the stock were selling for $23? $22?
Stock versus Options Stock in Bunyan Brewery is currently priced at $20 per share. A call option with a $20 strike and 60 days to maturity is quoted at $2. Compare the percentage gains and losses from a $2,000 investment in the stock versus the option in 60 days for stock prices of $26, $20, and $18.
Put-Call Parity A call option sells for $8. It has a strike price of $80 and six months until expiration. If the underlying stock sells for $60 per share, what is the price of a put option with an $80 strike price and six months until expiration? The risk-free interest rate is 6 percent per year.
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