1. You wrote six call option contracts on MNO stock with a strike price of $75 and an option price of $4.15. What is your total net profit or loss on all transactions related to this investment if the price of MNO is $78.20 on the option expiration date? Ignore taxes and transaction costs
A. Net loss of $570
B. Net profit of $4,410
C. Net profit of $570
D. Net loss of $4,410
2. You can realize the same value as that derived from stock ownership if you:
A. buy a call option and buy a put option on a stock and also lend out funds at the risk-free rate.
B. borrow funds at the risk-free rate of return and invest the proceeds in equivalent amounts of put and call options.
C. sell a put and buy a call on a stock as well as invest at the risk-free rate of return.
D. sell a put option and invest at the risk-free rate of return.
3. You buy one put option contract on a stock with exercise price of $55 at a put premium of $2.35. You also buy two call option contracts on the same stock with exercise price of $55 and a call premium of $3.18. Calculate the profit you make on your strategy if the stock price at the expiration of the contracts is $66 per share.
A. $1,329
B. $547
C. $1,166
D. $811
4. You buy 3 put contracts at a put premium of $1.79 and exercise price of $55. If, at expiration of the option, the underlying asset's price is $56.50, what is your profit?
A. -$87
B. -$537
C. $237
D. $427