1. What is the diffrence between Payback period and NPV net present value ? Explain and give exmple
2. You go long 5 call option contracts for IBM with a strike pricde of $120.00. The option premium is $3.00 per share. The market price for IBM stock on the day you enter the contracts is $121.25. On the options' expiration date, IBM is selling for $121.75. How much will you make in total if you exercise the options on the expiration date?
3. You short 5 contracts for call options on Monsanto (MON) stock with a strike pricde of $85.00. The option premium is $4.50 per share. At the time you short the contracts, MON's market pricde is $86.50. What is your break-even pricde for these contracts?