Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
74) You own 6 put option contracts on JL Industrial stock. You paid an option premium of $0.85
for a strike price of $37.50. On the option expiration date, the stock was selling for $35.00 a
share. What is your percentage return?
A) -100 percent
B) -18.75 percent
C) 71.26 percent
D) 194.00 percent
E) 200.20 percent
75) Jasmine purchased one call option with a strike price of $35 when the call premium was
$1.10. What is the break-even stock price?
A) $0.00
B) $33.90
C) $34.45
D) $35.00
E) $36.10
76) Jeff paid a call premium of $0.60 when he purchased his call option with a strike price of
$22.00. What is the break-even stock price?
A) $0.00
B) $0.25
C) $22.25
D) $22.60
E) $22.75
77) Russ paid a total of $75 to purchase 5 call options with a strike price of $17.50. What is the
break-even stock price?
A) $0.15
B) $0.30
C) $17.35
D) $17.65
E) $32.50
78) You purchased 5 put option contracts on Mountain Builders stock at an option premium of
$0.70. The strike price is $30. What is your break-even stock price?
A) $19.90
B) $24.35
C) $25.00
D) $29.30
E) $30.70
79) You own 4 put option contracts on ALZ stock. The contracts have a $17.50 strike price and
you paid an option premium of $0.40. What is the break-even stock price?
A) $17.10
B) $17.30
C) $17.50
D) $17.70
E) $17.90
80) Rosalita purchased a put option with a strike price of $35. She paid a total of $140 for the
contract. What is the break-even stock price?
A) $31.40
B) $33.60
C) $38.00
D) $41.60
E) $42.80
81) You own 200 shares of Delta stock which is currently worth $33 a share. You just paid an
option premium of $0.55 to buy two put contracts on this stock with a strike price of $30. What
is the maximum loss per share you are avoiding by purchasing the option contract?
A) $30.00
B) $30.85
C) $32.15
D) $33.00
E) $33.85
82) You purchased a put with a strike price of $37.5 and an option premium of $0.45. You
simultaneously bought the stock at a price of $36 a share. What is your profit per share on these
transactions if the stock price at expiration is $33.50?
A) -$1.15
B) -$0.15
C) $0.15
D) $0.75
E) $1.05
83) A 4-month call has a strike price of $20. The current underlying stock price is $21.45. What
is the intrinsic value of this call?
A) $0.00
B) $0.48
C) $1.45
D) $3.90
E) $4.35
84) A 3-month put has a strike price of $50. The underlying stock's price is $48.75. What is the
intrinsic value of this put?
A) $0.00
B) $0.90
C) $1.25
D) $2.30
E) $3.60
85) A 6-month put has a strike price of $32.50. The underlying stock's price is $31.10. What is
intrinsic value of this put?
A) $0.00
B) $0.70
C) $1.40
D) $2.10
E) $2.80
86) A 6-month call has a strike price of $30. The underlying stock is priced at $31.80 and the
option premium on the call is $2.40. What is the per share time value of the call?
A) $0.00
B) $0.60
C) $1.40
D) $2.80
E) $3.60
87) A 3-month put has a strike price of $45.00 and an option premium of $1.10. The underlying
stock is selling for $45.80 per share. What is the time value of the put?
A) $0.00
B) $0.60
C) $0.90
D) $1.60
E) $1.90
88) A European call has a strike price of $37.50. The underlying stock's price is $38.20. What is
the lower price bound of this call?
A) $0.00
B) $0.30
C) $0.50
D) $0.70
E) $1.00
89) A European 3-month call has a strike price of $35. The stock price is currently $34.30. What
is the lower price bound on this call?
A) $0.00
B) $0.30
C) $0.70
D) $1.00
E) $1.30
90) A stock is valued at $25.80 a share. A European 3-month call option has a strike price of $25
and an option premium of $1.40. The market rate is 9.5 percent and the risk-free rate is 3.25
percent. What is the price of a European 3-month put option with a $25 strike price?
A) $0.00
B) $0.09
C) $0.40
D) $1.48
E) $1.61
91) A 4-month, $25 call option on Teller stock has an option premium of $0.25. The 4-month,
$25 put option has an option premium of $0.80. The risk-free rate is 3 percent. The options are
European-style. What is the price of Teller stock?
A) $24.20
B) $24.53
C) $24.62
D) $25.97
E) $26.08
92) A stock is currently selling for $26.50. A 3-month put option with a strike price of $30 has
an option premium of $4.05. The risk-free rate is 2.5 percent and the market rate is 9.75 percent.
What is the option premium on a 2-month call with a $30 strike price? Assume the options are
European style.
A) $0.00
B) $0.33
C) $0.41
D) $0.67
E) $0.73
93) A stock is currently selling for $20.65. A 3-month call option with a strike price of $20 has
an option premium of $1.30. The risk-free rate is 2 percent and the market rate is 8 percent. What
is the option premium on a 3-month put with a $20 strike price? Assume the options are
European style.
A) $0.00
B) $0.15
C) $0.35
D) $0.55
E) $0.75
94) A call option with 6 months to expiration currently sells for $2.05. A put option with the
same expiration sells for $0.60. The options are European style. The risk-free rate is 3.0 percent
and the strike price of both options is $50. What is the current stock price?
A) $47.89
B) $49.19
C) $50.72
D) $51.29
E) $52.08
95) A call option with 1 month to expiration currently sells for $0.70. A put option with the same
expiration sells for $1.10. The options are European style. The risk-free rate is 3 percent and the
strike price of both options is $18.00. What is the current stock price?
A) $16.87
B) $17.06
C) $17.29
D) $17.56
E) $17.86
96) A call option has a premium of $1.95, a strike price of $45, and 3 months to expiration. The
current stock price is $42.20. The stock will pay a $1.15 dividend in one month. The risk-free
rate is 2.5 percent. What is the premium on a 3-month put with a strike price of $45? Assume the
options are European style.
A) $2.08
B) $2.15
C) $3.32
D) $4.12
E) $5.62
97) A call option has a premium of $0.60, a strike price of $40, and 3 months to expiration. The
current stock price is $39.60. The stock will pay a $0.80 dividend two months from now. The
risk-free rate is 3 percent. What is the premium on a 3-month put with a strike price of $40?
Assume the options are European style.
A) $0.25
B) $0.51
C) $0.78
D) $1.23
E) $1.50
98) What is the total option premium you will receive if you sell 5 June $25.00 calls on Texas
Instruments?
Texas Instruments (TXN)
CALL
PUT
Exp
Strike
Bid
Ask
Bid
Ask
May
25.00
6.60
6.70
N/A
0.01
Jun
25.00
6.50
6.75
N/A
0.03
Oct
25.00
6.95
7.25
0.39
0.42
May
27.50
4.10
4.15
N/A
0.01
Jun
27.50
4.05
4.30
0.07
0.10
A) $90
B) $850
C) $1,640
D) $2,170
E) $3,250
99) Jenny purchased 2 put option contracts on Winslow Mfg. stock. The option premium was
$0.80 and the strike price was $37.50. On the expiration date, the stock was selling for $38.00 a
share. What is the total payoff on the option contracts?
A) -$100
B) -$50
C) $0
D) $50
E) $150
100) You own three SPX put options with a strike of 1,850. What is the payoff at maturity for
this option contract if the S&P 500 index is 1,862?
A) -$2,200
B) -$22
C) $0
D) $22
E) $2,200
101) You own 5 put option contracts on JL Industrial stock. You paid an option premium of
$1.15 for a strike price of $27.50. On the option expiration date, the stock was selling for $24.00
a share. What is your percentage return?
A) -100 percent
B) -18.75 percent
C) 71.26 percent
D) 194.00 percent
E) 204.00 percent
102) You own 300 shares of Delta stock which is currently worth $42 a share. You just paid an
option premium of $0.70 to buy three put contracts on this stock with a strike price of $40. What
is the maximum loss per share you are avoiding by purchasing the option contract?
A) $40.00
B) $42.85
C) $44.15
D) $47.00
E) $53.85
103) A 3-month put has a strike price of $45.00 and an option premium of $0.80. The underlying
stock is selling for $45.10 per share. What is the time value of the put?
A) $0.00
B) $0.60
C) $0.90
D) $1.60
E) $1.90
104) A stock is currently selling for $21.00. A 3-month call option with a strike price of $20 has
an option premium of $1.30. The risk-free rate is 3 percent and the market rate is 8 percent. What
is the option premium on a 3-month put with a $20 strike price? Assume the options are
European style.
A) $0.00
B) $0.15
C) $0.35
D) $0.55
E) $0.75
