calculate rate of return

Question

Refer to the following table.

Reliance Stock Price Strike Price Calls Puts

69.50 65 6.80 1.65

69.50 70 3.50 3.45

69.50 75 1.70 6.80

5a. Suppose you buy a call option for $6.80 that matures in June with a strike price of $65. What is your dollar profit if the stock price in June is $70? What if it is $50? Calculate the rate of return.

5b. Now suppose you buy a put option for $1.65 that matures in June with a strike price of $65.What is your dollar profit if the stock price in June is $70? What if it is $50? Calculate the rate of return.

Answer 1

If I like you, I'll call you up.

If I don't, Ill put you down.