Business, 27.08.2020 01:01 tiffanibell71
The common stock of the C. A.L. L. Corporation has been trading in a narrow range around $90 per share for months, and you believe it is going to stay in that range for the next 3 months. The price of a 3-month put option with an exercise price of $90 is $8.69.a. If the risk-free interest rate is 5% per year, what must be the price of a 3-month call option on C. A.L. L. stock at an exercise price of $90 if it is at the money? (The stock pays no dividends.) (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)Price of a 3-month call option $ b-1. What would be a simple options strategy using a put and a call to exploit your conviction about the stock price’s future movement?Stock price's future movement (Click to select)Buy a putSell a straddleBuy a callSell a callBuy a straddleSell a put b-2. What is the most money you can make on this position? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)Amount $ b-3. How far can the stock price move in either direction before you lose money? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)Stock price $ c. How can you create a position involving a put, a call, and riskless lending that would have the same payoff structure as the stock at expiration? What is the net cost of establishing that position now? (Do not round intermediate calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)Position Immediate CF CF in 3 monthsST < X ST > X Call (long) (Click to select)(St − 90)−(St − 90) Put (short) (Click to select)−(90 − St)(90 − St) Lending position Total (Click to select)S0St (Click to select)StS0
Answers: 1
Business, 22.06.2019 19:40, pchisholm100
You estimate that your cattle farm will generate $0.15 million of profits on sales of $3 million under normal economic conditions and that the degree of operating leverage is 2. (leave no cells blank - be certain to enter "0" wherever required. do not round intermediate calculations. enter your answers in millions.) a. what will profits be if sales turn out to be $1.5 million?
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Assume the total cost of a college education will be $250,000 when your child enters college in 17 years. you presently have $69,000 to invest. what annual rate of interest must you earn on your investment to cover the cost of your child’s college education? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)
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enrique borrowed $3600 to put a down payment on a motorcycle. the loan had a simple interest rate of 8% for 2 years. use the formula i = prt to find the amount of interest he will pay on the loan. i = interest; p = principal; r = rate (expressed as a decimal 0.08); t = time in years.
Answers: 1
The common stock of the C. A.L. L. Corporation has been trading in a narrow range around $90 per sha...
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