Determine johns net dollar gain per share

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Reference no: EM131520557

1. John (a speculator; he doesn't own the stock) has purchased a put option with an exercise price of $56 for a premium of $10. A few days later, John buys the stock at $44 per share and he also exercises the option. Determine John's net dollar gain per share.

2. Beth (a hedger; she owns the stock) has previously purchased stock in a company at $53 per share. Call options at a $50 exercise price presently have a $4 premium per share. Beth sells a call option to Joe on the stock that she owns. If the call option is exercised by Joe when the price of the stock is $58, what is the net gain or loss per share to Beth?

Reference no: EM131520557

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