Calculate the number of call options

Assignment Help Finance Basics
Reference no: EM132594396

You hold 1000 BHP shares with a beta of 0.91. You anticipate a decline in equity values and wish to hedge using BHP call options with a delta of 0.8. BHP shares are currently $50.00, and the call options are $0.52. Calculate the number of call options you would need to hedge your position and indicate whether you need to go long or short.

Reference no: EM132594396

Questions Cloud

Integrate under united social contract : Should cultures within the United States be expected to set aside some traditions or beliefs and integrate under a united social contract? Why?
Unique strategic challenges that christian universities face : What are some of the unique strategic challenges that Christian universities face?
Show Palka journal entry to record its acquisition : Show Palka's journal entry to record its January 1, 2018, acquisition of an additional 25 percent ownership of Sellinger Company shares
Maximum takeover premium that cloudy skies : What is the maximum takeover premium that Cloudy Skies should be prepared to pay for Wet Sunday?
Calculate the number of call options : Calculate the number of call options you would need to hedge your position and indicate whether you need to go long or short.
Define bond discounts and premiums : Question - Define bond discounts and premiums. Is 2020 a good time to purchase interest-sensitive securities? Please explain
Prepare the journal entry to record the exchange : In 2015, Malawi Inc. exchanged equipment for two delivery trucks. Prepare the journal entry to record the exchange
Human resource practices and effective organizational change : There is a strong linkage between standard human resource practices and effective organizational change.
Does media communications affect agenda setting : Does media communications affect agenda setting and public opinion? If so, do you believe this is appropriate?

Reviews

Write a Review

Finance Basics Questions & Answers

  Stakeholders stand out to managers when they exhibit

Stakeholders stand out to managers when they exhibit

  Paying the minimum monthly payment

Assume that Francisco's credit card has APR of 15.75% How much does he wind up paying the credit card company by only paying the minimum monthly payment of $410

  Mill mountain coffee company currently operates

Mill Mountain Coffee Company currently operates 12 coffee shops in downtown Charlotte. The company has been losing money and wants to downsize by closing some stores.

  Will philip choose public housing or rent on private market

Philips demand curve for housing is shown in the following figure. (Assume that quantity of housing is measured simply by the number of square feet.

  If the company waits one year there is a 58 percent

hickock mining is evaluating when to open a gold mine. the mine has 67000 ounces of gold left that can be mined and

  Specific identification-fifo-lifo

Specific Identification, FIFO, LIFO, and Weighted-Average Swing Company's beginning inventory and purchases during the fiscal year ended September 30, 20-2, were as follows:

  How much of karens portfolio is invested

The utility fund has a beta of 0.5 and the technology fund has a beta of 1.3. If the portfolios beta equal 1.10, how much of Karens portfolio is invested in the technology fund?

  Find the probability you get both contracts

Contracts. Your company bids for two contracts. You believe the probability you get contract #1 is 0.8.

  What is the balance in the account after 4 years

What is the balance in the account after 4 years? How much of this balance corresponds to? "interest on? interest"?

  Examine the annual stockholders report of a company

The annual report is a document that provides financial and operating information about a company to its owners, the stockholders.

  Estimate standard deviation and variance in annual returns

Unicom is a regulated utility serving Northern Illinois. The following table lists the stock prices and dividends on Unicom from 1989 to 1998.

  Which capital budgeting technique is best

Which capital budgeting technique is best (payback period, IRR, NPV) and what are some situations where you might use an alternative method

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd