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What is the value of the contract on the exercise date

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Reference no: EM132854354

Question - An investor has 80,000 EGP which will be invested in a long-put option contract, the premium per share is 20 EGP. If the market price of the stock on the exercise date is 50 EGP, and the strike price is 56 EGP.

Required -

a) What is the value of the contract on the exercise date? and determine whether it's in the money, out of the money, or at the money? And why?

b) What is the rate of return?

Reference no: EM132854354

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