Both a call and a pot currently are traded on stock XYZ; both have strike prices

Question

Both a call and a pot currently are traded on stock XYZ; both have strike prices of $51 and maturities of six months What will be the profit/loss to an investor who buys the call for $4 10 in the following scenarios for stock prices in six months? (Loss amounts should be Indicated by a minus sign. Round your answers to 2 decimal places.) What will be the profitless in each scenario to an investor who buys the put for $6.10? (Loss amounts should be indicated by a minus sign Round your answers to 2 decimal places)

Explanation / Answer

Strike Price of Call Option = $ 51

a) The profit or loss to investor who buys the call for $ 4.10 in the following scenarios for stock prices in six months:-

Strike Price of Put Option = $ 51

b) The profit or loss to investor who buys the Put for $ 6.10 in the following scenarios for stock prices in six months:-

Stock Prices Profit / Loss a. 41 (-) 4.10 b. 46 (-) 4.10 c. 51 (-) 4.10 d. 56 56 - 51 - 4.10 = 0.90 e. 61 61 - 51 - 4.10 = 5.90

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