Consider a call and a put on the same non dividend paying stock. A trader just sold 100 CBOE of the calls and 100 CBOE puts. Every option covers 100 shares and all the calls and the puts are for the same strike price, K and the same expiration date, T. Given for the calls: Delta(c) = .6750; Gamma(c) = .0500.8.1 Calculate the Delta and the Gamma of the position of the trader.8.2 Give an interpretation of the Delta of the position.8.3 The trader holds the above position. Calculate the number of share to hold long or short so as to create a new Delta – neutral position for the trader.

In the packaging department of a large aircraft parts distributor, a fairly reliable estimate of packaging and processing costs can be determined by knowing the weight of an order. thus, the weight is a cost driver that accounts for a sizable fraction of the packaging and processing costs at this company. data for the past 10 orders are given as follows: a. estimate the b 0b0 and b 1b1 coefficients, and determine the linear regression equation to fit these data. b. what is the correlation coefficient (r)? c. if an order weighs 310310 lb, how much should it cost to package and process it? c