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Today’s price of IBM’s common stock is $150. A May 2018 call option on this IBM stock has an exercise price of $150 and costs $5. A May 2018 put option on this stock also has an exercise price of $150 and costs $4.
a. What is the cost of holding the long call and long put, and what is this position called?
b. If the stock price is $135 at expiration, what is the portfolio of options worth?
c. If the stock price is $160, what is the portfolio of options worth?
d. How do these profits and losses compare with the value of the stock at expiration?
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Cusic Industries had the following operating results for 2012: sales = $29,000; cost of goods sold = $19,710; depreciation expense = $5,220; interest expense = $2,640; dividends paid = $1,400. At the beginning of the year, net fixed assets were $17,3..
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