You have taken a long position in a call option on ibm, Finance Basics

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You have taken a long position in a call option on ibm

You have taken a long position in a call option on IBM common stock. The option has an exercise price of $136 and IBM's stock currently trades at $140. The option premium is $5 per contract.

a.) What is your net profit on the option if IBM's stock price increases to $150 at expiration of the option and you exercise the option?

b.) How much of the option premium is due to intrinsic value versus time value?

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Finance Basics: You have taken a long position in a call option on ibm

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Finance Basics: You have taken a long position in a call option on ibm

Reference No:- TGS0625641

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : As part of that process the company wants to set its target

Q : The case study assignments will focus on orrstown financial

Q : Pearson brothers recently reported an ebitda of 75 million

Q : A 150 kg rock density is 2500 kgm 3 is dropped to a lake

Q : You have taken a long position in a call option on ibm

Q : A company manufactures two products a and b product a can

Q : A resistor with r 908 resistance is connected to a real

Q : Now assume that instead of taking a position in the call

Q : If she starts making these deposits on her 33th birthday

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: You have taken a long position in a call option on ibm

Reference No:- TGS0625641

Recent Questions Asked Finance Basics

Q : As part of that process the company wants to set its target

Q : The case study assignments will focus on orrstown financial

Q : Pearson brothers recently reported an ebitda of 75 million

Q : A 150 kg rock density is 2500 kgm 3 is dropped to a lake

Q : You have taken a long position in a call option on ibm

Q : A company manufactures two products a and b product a can

Q : A resistor with r 908 resistance is connected to a real

Q : Now assume that instead of taking a position in the call

Q : If she starts making these deposits on her 33th birthday

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