罗斯《公司理财》英文习题答案chap022..docVIP

Chapter 22: Options and Corporate Finance 22.1 a. An option is a contract which gives its owner the right to buy or sell an underlying asset at a fixed price on or before a given date. b. Exercise is the act of buying or selling the underlying asset under the terms of the option contract. c. The strike price is the fixed price at which the option holder can buy or sell the underlying asset. The strike price is also called the exercise price. d. The expiration date is the maturity date of the option. It is the last date on which an American option can be exercised. It is the only date on which a European option can be exercised. A call is an option contract, which gives its owner the right to buy an underlying asset at a fixed price on or before a given date. A put is an option contract, which gives its owner the right to sell an underlying asset at a fixed price on or before a given date. 22.2 American options can be exercised on any date up to and including the exercise date. A European option can be exercised only on the expiration date. 22.3 The lower bound of the value of the put is Max {E - S, 0} = $40 - $35 = $5. Since the option is selling for $4.5, the best strategy is (1) buy more put options at $4.5 and (2) exercise them to get arbitrage. 22.4 a. It can be exercised on any date up to and including the expiration date. b. It can be exercised only on February 18 of next year. c. The option is not worthless. 22.5 Payoff S $80 S = $80 S $80 Short 10 puts -10 ($80 - S) $0 0 Long 5 calls $0 $0 5 (S - $80) Total payoff -10 ($80 - S) $0 5 (S - $80) 22.6 a. Payoff = $55 - $50 = $5 b. Payoff = max {$45 - $50, $0} = $0 c. 22.7 a. Payoff = $0 b. Payoff = $50 - $45 = $5 c 22.8 a. S = $65 S = $72 S = $80 Long 2 calls $0 200($72-$70)=$400 200($80-$70)=$2,000 Long 1 put 100($75-$65)=$1,000 100($75-$72)=$300 $0 Total payoff $1,000 $700 $2,000 b. S $70 $70 S $75 S ? $7