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# Smith Enterprises stock currently sells for \$1750 A call option on the stock has a strike price of \$20 and currently sells at What is the time value of the option

Smith Enterprises stock currently sells for \$17.50. A call option on the stock has a strike price of \$20 and currently sells at \$4.50. What is the time value of the option?

a.\$0

b.\$2.50

c.\$2

d.\$4.50

12.Smith Enterprises stock currently sells for \$17.50. A put option on the stock has a strike price of \$20 and currently sells at \$4.50. What is the time value of the option?

a.\$0

b.\$2.50

c.\$2

d.\$4.50

13.Smith Enterprises stock currently sells for \$17.50. A put option on the stock has a strike price of \$20 and currently sells at \$4.50. What is the intrinsic value of the option?

a.\$0

b.\$2.50

c.\$2.00

d.\$4.50

14.Suppose you bought 10 Smith Enterprise call options with a strike price of \$52 at \$2.75 per option. If the price of Smith stock is \$50, what is your net profit (or loss)? Ignore transaction costs.

a.\$0

b.-\$27.50

c.\$27.50

d.\$500

15.Suppose you bought 10 Smith Enterprise put options with a strike price of \$52 at \$2.75 per option. If the price of Smith stock is \$48, what is your net profit (or loss)? Ignore transaction costs.

a.\$40

b.\$0

c.\$12.50

d.-\$27.50

16.Suppose you bought 10 Smith Enterprise put options with a strike price of \$52 at \$2.75 per option. If the price of Smith stock is \$56, what is your net profit (or loss)? Ignore transaction costs.

a.\$40

b.\$0

c.-\$27.50

d.\$12.50

17.Suppose you bought 10 Smith Enterprise call options with a strike price of \$52 at \$2.75 per option. If the price of Smith stock is \$56, what is your net profit (or loss)? Ignore transaction costs.

a.\$0

b.\$12.50

c.-\$27.50

d.\$40

18.A call option with a \$50 strike price on Bavarian Sausage stock will expire in one year. If you know that the risk free rate is 4%, that the stock currently sells at \$47 and the put on the same stock has a value of \$2.75, what is the price of the call?

a.\$2.75

b.\$3.56

c.\$1.67

d.\$5.36

19.A put option with a \$50 strike price on Bavarian Sausage stock will expire in one year. If you know that the risk free rate is 4%, that the stock currently sells at \$47 and the call on the same stock has a value of \$2.75, what is the price of the put?

a.\$4.67

b.\$2.75

c.\$3.83

d.\$1.56

20.A put option with a \$50 strike price on Bavarian Sausage stock will expire in one year. If you know a call on the same stock has a value of \$2.75, that the price of the put is \$1.26 and the stock is currently selling at \$47, what is the implied risk free rate?

a.4.56%

b.3.07%

c.5.43%

d.9.87%

Feb 13 2020 View more View Less