Question you own a call option on intuit stock with a, Ask an Expert

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Question: You own a call option on Intuit stock with a strike price of $40. The option will expire in exactly three months.

a. If the stock is trading at $55 in three months, what will be the payoff of the call?

b. If the stock is trading at $35 in three months, what will be the payoff of the call?

c. Draw a payoff diagram showing the value of the call at expiration as a function of the stock price at expiration.

Strike Price $40.00

a. If the stock is trading at $55 in three months, what will be the payoff of the call?

Spot price in 3 months $55.00

Exercise value of call

b. If the stock is trading at $35 in three months, what will be the payoff of the call?

Spot price in 3 months $35.00

Exercise value of call

c. Draw a payoff diagram showing the value of the call at expiration as a function of the stock price at expiration.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92790921

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