1 answer

1. Consider a call option selling for $ 4 in which the exercise price is $50.

A) Determine the value at expiration and the profit for a buyer under the following outcomes:

i. The price of the underlying at expiration is $55

ii. The price of the underlying at expiration is $51

iii. The price of the underlying at expiration is $48

B) Determine the value at expiration and the profit for a seller under the following outcomes:

i. The price of the underlying at expiration is $49

ii. The price of the underlying at expiration is $52

iii. The price of the underlying at expiration is $55

C) Determine the following:

i. The max profit to the buyer (max loss to the seller)

ii. The max loss to the seller (max profit to seller)

D) Determine the breakeven price of the underlying at expiration

2. Consider a put option on the Nasdaq 100 selling for $106.25 in which exercise price is 2100.

A) Determine the value at expiration and the profit for a buyer under the following outcomes:

i. The price of the underlying at expiration is 2125

ii. The price of the underlying at expiration is 2050

iii. The price of the underlying at expiration is 1950

B) Determine the value at expiration and the profit for a seller under the following outcomes:

i. The price of the underlying at expiration is 1975

ii. The price of the underlying at expiration is 2150

C) Determine the following:

iii. The max profit to the buyer (max loss to the seller)

iv. The max loss to the seller (max profit to seller)

D) Determine the breakeven price of the underlying at expiration

3. You simultaneously purchase an underlying priced at $77 and write a call option on it with an exercise price of $80 and selling at $6.

A) What is the term commonly used for the position that you have taken?

B) Determine the value at expiration and the profit for your strategy under the following outcomes:

i. The price of the underlying at expiration is $70

ii. The price of the underlying at expiration is $75

iii. The price of the underlying at expiration is $80

iv. The price of the underlying at expiration is $85

C) Determine the following:

i. The max profit

ii. The max loss

iii. The expiration price of the underlying at which you would realize the max profit

iv. The expiration price of the underlying at which you would realize the max loss

D) Determine the breakeven price at expiration

4. Suppose you simultaneously purchase an underlying priced at $77 and a put option on it with an exercise price of $75 and selling at $3.

A) What is the term commonly used for the position that you have taken?

B) Determine the value at expiration and the profit for your strategy under the following outcomes:

i. The price of the underlying at expiration is $70

ii. The price of the underlying at expiration is $75

iii. The price of the underlying at expiration is $80

iv. The price of the underlying at expiration is $85

C) Determine the following:

i. The max profit

ii. The max loss

iii. The expiration price of the underlying at which you would realize the max loss

D) Determine the breakeven price at expiration

5. You are bullish about the underlying that is currently trading at a price of $80. You choose to go long one call option on the underlying with an exercise price of $75 and selling at $10, and go short 1 call option on the underlying with an exercise price of $85 and selling at $2. Both the calls expire in 3 months.

A) What is the term commonly used for the position that you have taken?

B) Determine the value at expiration and the profit for your strategy under the following outcomes:

i. The price of the underlying at expiration is $89

ii. The price of the underlying at expiration is $78

iii. The price of the underlying at expiration is $70

C) Determine the following:

i. The max profit

ii. The max loss

D) Determine the breakeven underlying price at expiration of the call options

E) Verify that your answer to Part D above is correct

6. You expect a currency to depreciate with respect to USD. The currency is currently trading at a price of $0.75. You decide to go long 1 put option on the currency with an exercise price of $0.85 and selling at $0.15, and go short 1 put option on the currency with an exercise price of $0.70 and selling at $0.30. Both the puts expire in 3 months.

A) What is the term commonly used for the position you have taken?

B) Determine the value at expiration and the profit for your strategy under the following outcomes:

i. The price of the underlying at expiration is $0.87

ii. The price of the underlying at expiration is $0.78

iii. The price of the underlying at expiration is $0.68

C) Determine the following:

i. The max profit

ii. The max loss

D) Determine the breakeven underlying price at the expiration of the put options

E) Verify that youк answer to Part В above is correct

7. A stock is currently trading at a price of $114. You construct a butterfly spread using calls of 3 different strike prices on this stock, with the calls expiring at the same time. You go long 1 call with an exercise price of $110 and selling at $8, go short 2 calls with an exercise price of $115 and selling at $5, and go long 1 call with an exercise price of $120 and selling at $3.

A) Determine the value at expiration and the profit for your strategy under the following outcomes:

i. The price of the underlying at expiration of the calls is $106

ii. The price of the underlying at expiration of the calls is $110

iii. The price of the underlying at expiration of the calls is $115

iv. The price of the underlying at expiration of the calls is $120

v. The price of the underlying at expiration of the calls is $123

B) Determine the following:

i. The max profit

ii. The max loss

iii. The stock price at which you would realize the max profit

iv. The stock price at which you would incur the max loss

C) Determine the breakeven underlying price at expiration of the call options

1 answer
#####
A 25 years’ girl who was involved in sexual activity years ago comes to the clinic...

A 25 years’ girl who was involved in sexual activity years ago comes to the clinic with distended abdomen complains of fatigue, abdominal pain and loss of appetite. On physical examination, the patient had yellowish skin and yellowish eyes. Laboratory macroscopic examination of stool and urine...

1 answer
#####
Assume that a sample is used to estimate a population mean . Find the 95% confidence...

Assume that a sample is used to estimate a population mean . Find the 95% confidence interval for a sample of size 599 with a mean of 27.4 and a standard deviation of 6.9. Enter your answer as a tri-linear inequality accurate to one decimal place (because the sample statistics are reported accurate ...

1 answer
#####
Question V Find the frequenoy in which I and Vo have the same phase z, =...

Question V Find the frequenoy in which I and Vo have the same phase z, = 13.000 +Joo352 R= 120 Ω L=19mH C=220 pF Z, L 8 Figure 5...

1 answer
#####
A fax was received in a private home where no fax was expected. The fax has...

A fax was received in a private home where no fax was expected. The fax has come from a nearby long-term care facility, it is addressed to a provider, has personal information about a resident of the facility, and requests a medication change. What should the home owner do? What responsibility and a...

1 answer
#####
A 2.20-g bullet embeds itself in a 1.50-kg block, which is attached to a spring of...

A 2.20-g bullet embeds itself in a 1.50-kg block, which is attached to a spring of force constant 750 N/m . If the maximum compression of the spring is 5.50 cm , find the initial speed of the bullet....

1 answer
#####
Suppose that the joint probability density function of (X, Y) is given by fx, xx, y)...

Suppose that the joint probability density function of (X, Y) is given by fx, xx, y) =[1 – (1 – 2x)(1 – 2y)]lo (x), 1V), where the parameter o satisfies -1 Sa<1. (a) Prove or disprove: X and Y are independent if and only if X and Y are un- correlated. (X An isosceles triangle is...

1 answer
#####
Question 27 1 pts A spring is hung from the ceiling. A 2.0-kg mass suspended hung...

Question 27 1 pts A spring is hung from the ceiling. A 2.0-kg mass suspended hung from the spring extends it by 6.0 cm.A downward external force applied to the mass extends the spring an additional 10 cm What is the work done by the force? - 3.6J 3.3 - 3.4 105J O 3.3J O 3.6J...

1 answer
#####
Calculate DHrxn for the reaction: CaO(s) + CO2(g) à CaCO3(s) given these reactions and their DH’s:...

Calculate DHrxn for the reaction: CaO(s) + CO2(g) à CaCO3(s) given these reactions and their DH’s: 1) Ca(s) + CO2(g) + ½ O2(g) à CaCO3(s) DH = -814.1kJ 2) 2Ca(s) + O2(g) à 2 CaO (s) DH = -1269.8kJ...

1 answer
#####
O Moodle KIvy Software ion 2 Multiplying profit margin by asset turnover yields ered Select one:...

O Moodle KIvy Software ion 2 Multiplying profit margin by asset turnover yields ered Select one: s out of a. Profit margin ratio b. Gross margin ratio ag cion C. Return on assets d. None of the above revious page PREVIOUS ACTIVITY Appendix...

1 answer
#####
20. The False Claims Act is the federal government's primary civil remedy for _claims. erroneous improper...

20. The False Claims Act is the federal government's primary civil remedy for _claims. erroneous improper mis-coded inaccurate 21. Under the Fee Schedule, it is important for providers to ensure that their prices are the fee schedule rates In order to get full payment for services rendered. equa...

1 answer
#####
Use at least 3 sig fig. I will rate This crate has a weight of 200...

use at least 3 sig fig. I will rate This crate has a weight of 200 pounds. The kinetic coefficient between it and the floor is 0.45. If a constant force P of 120 pounds is applied as shown, how far will the crate move in 5 seconds, if it is initially at rest? (Give your answer in units of feet)...

1 answer
#####
What is the mechanism for the following reaction? 83. Provide the major organic product of the...

what is the mechanism for the following reaction? 83. Provide the major organic product of the following. Section: 17-13 CHICOH, 2 CH, CHỊCH,CH,w 1. NaOCH 2. BCH CH CH CH Br . CH,(C0 CH) 3. NaOCH 4. H2O.A...

1 answer
#####
Your variable annuity charges administrative fees at an annual rate of 0.17 percent of account value....

Your variable annuity charges administrative fees at an annual rate of 0.17 percent of account value. Your average account value during the year is $218,000. What is the administrative fee for the year? (Round your answer to the nearest whole dollar.) Annual administrative fee 7...

1 answer
#####
What could be done to improve websites that provide information about nursing home to help people...

what could be done to improve websites that provide information about nursing home to help people when choosing a nursing home for a loved one...