All transaction-related costs

Assignment Help Financial Management

Reference no: EM13929745

Grant purchased one call on XYZ stock at an exercise price of $25. The market price of XYZ stock when Grant purchased the call was $24 a share. XYZ is currently priced at $30 a share. Grant paid $120 to buy the call. How much profit will Grant make if he exercises the option today and then sells the shares? Ignore all transaction-related costs. Show work.

Reference no: EM13929745

Questions Cloud

Understand the basic structure and function of the cell : A Biologist is examining the epiuthelial cells of the intestine under the microscope. a. Describe at least six organelles that he is likely to see in the cells and explain their functions.

What holding period return do you expect on this call : The price of ABC stock is currently $42 per share, but in six months you expect it to rise to $50. ABC does not pay a dividend. You buy a six-month call on ABC, with a strike price of $45. The option cost $200. What holding period return do you expec..

What if you could take your knowledge and skills : What if you could take your knowledge and skills and give others the benefit of your work by sharing the impact of interpersonal communication skills with them?

Initial margin and maintenance margin : Eric has just purchased a heating oil contract at $2.05 per gallon. The contract size is 21,000 gallons. Initial margin is $6,075; maintenance margin is $4,500. If the price of heating oil is $2.15 when the contract expires, Eric's profit or loss is?..

All transaction-related costs : Grant purchased one call on XYZ stock at an exercise price of $25. The market price of XYZ stock when Grant purchased the call was $24 a share. XYZ is currently priced at $30 a share. Grant paid $120 to buy the call. How much profit will Grant make i..

Write sql statements : Write a SQL statement to display the Major of students with no duplications. Do not display student names.

Advantages of the irrevocable trust over revocable trust : Trusts can be treated as separate tax entities or as conduits through which income is passed to the beneficiaries. An irrevocable trust has certain advantages not provided by a revocable trust. Which of the following is (are) advantages of the irrevo..

Real output in an economy may be expressed as the ratio : Real output in an economy may be expressed as the ratio of _____________.

Discuss one of your intellectual virtues or vices : In an essay of no more than 500 words, discuss one of your intellectual virtues (e.g. curiosity) or vices (e.g. arrogance). Briefly explain why you characterize it as such.

User Account

All Pages