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CHAPTER 15: Options Market

Tim Asisten Dosen IPM

SOAL 1: PILIHAN GANDA

1. The price of a four-month GE call a. $2


option with an exercise price of $35 is b. $3
$6. The current price of GE stock is c. $10
$40 per share. The call holder exercises d. $12
the call at expiration when the price of
GE stock is $43. What is the payoff to 4. You have taken a protective put
the call holder? (Each contract is for position by purchasing 100 shares of
100 shares of stock.) AMR stock at $20 per share and one
a. $200 AMR put option contract at a premium
b. $300 of $1. The put has a strike price of $15
c. $500 and expires in 6 months. What is the
d. $800 maximum potential loss for the
protective put?
2. A three-month HP put option with an a. $100
exercise price of $60 sells for a b. $500
premium of $8. The put is in the money c. $600
only if the price of HP stock is … d. $800
a. greater than $68 per share
b. greater than $60 per share 5. You just purchased a three-month BP
c. less than $60 per share call option (exercise price $75) and a
d. less than $52 per share three-month BP put option (exercise
price $75). The call premium is $6 and
the put premium is $2. Your maximum
3. The price of a two-month AT&T put potential loss from this position is ….
option with an exercise price of $45 is (Assume each contract is for 100
$7. The current price of AT&T stock is shares of stock.)
$40 per share. The put holder exercises a. $200
the put at expiration when the price of b. $600
AT&T stock is $35. What is the profit c. $800
per share to the put holder? d. unlimited
CHAPTER 15: Options Market
Tim Asisten Dosen IPM

6. An investor buys a two-month XYZ 9. A callable bond gives an option to the


call option contract with a $25 strike ____________, so that the coupon rate
price, and sells a two months XYZ call for a newly-issued callable bond is
option contract with a $30 strike price. ____________ than the coupon on
The premium is $2 for the call with the straight debt.
$25 strike price. The premium is $1 for a. holder of the bond; greater
the call with the $30 strike price. What b. holder of the bond; less
is the maximum potential profit for this c. issuing firm; greater
position? d. issuing firm; less
a. $400
b. $500 10. Which one of the following statements
c. $600 about warrants is false?
d. unlimited a. Warrants require a firm to issue a
new share of stock to satisfy its
7. Suppose that you write a six-month obligation.
IBM call option with an exercise price b. Warrants result in a cash flow to the
of $100 when the current price of IBM firm when the warrant holder pays
stock is $110 per share. The call the exercise price.
premium is $18. At expiration, the c. Exercise of a warrant requires the
price of IBM stock is $104. What is firm to deliver an already-issued
your profit per share? share of stock to discharge the
a. $12 obligation.
b. $14 d. Warrants are often issued in
c. $18 conjunction with another security.
d. $22

8. Assume that you are bearish on a


particular stock. Which of these
options you would buy?
a. Call option
b. Put option
c. LEAPS
d. Covered call
CHAPTER 15: Options Market
Tim Asisten Dosen IPM

SOAL 2: STRADDLE

You establish a straddle on Walmart using September call and put options with a strike price
of $50. The call premium is $4.25 and the put premium is $5.

a. What is the most you can lose on this position?


b. What will be your profit or loss if Intel is selling for $58 in September?
c. At what stock prices will you break even on the straddle?

SOAL 3: COLLAR

Imagine that you are holding 5,000 shares of stock, currently selling at $40 per share. You are
ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. If
you continue to hold the shares until January, however, you face the risk that the stock will
drop in value before year-end. You decide to use a collar to limit downside risk without laying
out a good deal of additional funds. January call options with a strike price of $45 are selling
at $2, and January puts with a strike price of $35 are selling at $3. What will be the value of
your portfolio in January (net of the proceeds from the options) if the stock price ends up at (a)
$30? (b) $40? (c) $50? Compare these proceeds to what you would realize if you simply
continued to hold the shares.