1)
The current stock price of ATT is $22/share. Mr.
A, who does not own any ATT stock, is considering the following strategies:
a.
Buy 100 shares of ATT stocks
b.
Buy a call option ATT/4 months/23, selling for
$6/share
c.
Write a call option ATT/4 months/30 and receive
a $5/share premium
d.
Buy a put ATT/4 months/40, selling for $8/share
e.
Write a put ATT/4 months/25 and receive a
$5/share premium
Calculate the gain/loss for each strategy for the following
cases:
1.
ATT stock moves up to $23/share
2.
ATT stock moves up to $50/share
3.
ATT stock retre0ats to $1/share
