Calculate the profit-loss on your portfolio

Assignment Help Finance Basics
Reference no: EM131936629

Question: Assume you create a portfolio that consists of a long position in one 9 month call option and a short position in one 9 month put option on euros. Both the call and the put have 100,000 euros attached. The strike price for the call and put options is $1.3 and $1.4, respectively. The call and put premium is $.04 and $.03, respectively.

Calculate the profit/loss (in terms of USD) on your portfolio if the spot rate is .8 euros per dollar when the options expire. Round intermediate steps to four decimals and your final answer to two decimals. Do not use currency symbols or words when entering your response.

Reference no: EM131936629

Questions Cloud

How much will a registered retirement savings deposit : How much will a registered retirement savings deposit of $10000.00 be worth in 15 years at 6.00% compounded quarterly? How much of the amount is interest?
What is the worst-case npv and best-case npv for project : Consider project to supply Detroit with 20,000 tons of machine screws annually for automobile production.What is worst-case NPV and Best-case NPV for project?
Write a program to prompt the user for hours : Write a program to prompt the user for hours and rate per hour using input to compute gross pay. Pay the hourly rate for the hours up to 40 and 1.5 times.
Formulate the objective function of farmer : 1. Please formulate the objective function of this farmer. 2. Please write down all the constraints of this LP problem.
Calculate the profit-loss on your portfolio : Calculate the profit/loss (in terms of USD) on your portfolio if the spot rate is .8 euros per dollar when the options expire.
What would you do differently as student of entrepreneurship : ENTREPRENEURSHIP ASSIGNMENT - What are some of the primary reasons why an executive summary is critical to any business plan
Explain the purpose of the student degree progress project : Explain the purpose of the student degree progress project. Describe the end objectives or project outcomes. List the assigned tasks for each role.
What is the implied volatility : Assume that the cost of insuring an index fund ATMF (S = PV (K)) is 6%. The contract is for 3 months. What is the implied volatility?
Calculate monthly payment amount of a car loan : Assume a car loan amount of $100,000, with annual interest rate 6% and 5 years term. Calculate monthly payment amount.

Reviews

Write a Review

Finance Basics Questions & Answers

  Briefly explain two ways interest rates influence

Briefly explain two (2) ways interest rates influence the U.S. and global financial environment. Provide at least one (1) example of such influence for both the U.S. financial environment and one (1) example for the global financial environment.

  Construct an arbitrage trade to take advantage

Consider the following trade. German government bond (bund) futures trade on the LIFFE (London) and DTB (Frankfort) exchanges. The futures contracts.

  Find the stock price and answer the question

Your company has declared a dividend of $2.50 per share. You and rest of the marginal investors are in the 35 percent tax bracket.

  Computing the beta coefficient of a common stock

XYZ's unlevered beta coefficient is 0.30, its corporate income tax rate equals 40%, and its target market value capital structure is 80% interest‐bearing debt and 20% common stock equity. Compute the levered beta coefficient for XYZ's common sto..

  International accounting foreing currency translation

A 100 percent owned foreign subsidiary's trial balance consist of the account listed as follows. Which exchange rate - current, historical, or average would be used to translate these accounts to parent currency assuming that the foreign currency ..

  Significance of the rla and the norris-laguardia act

Type your answers to the prompts below in a Word document. Remember to include parenthetical citations (in APA format) to reference your sources.

  Default risk is the risk of a company not being able to pay

question 1the modigliani and miller mm proposition 2 highlights the fact that as the level of debt in a companys

  In late 1999 the financial staff of coca-cola estimated the

coca-colas shareholders value sharply declined during the 1999-2000 period. for the 15 month starting from january 1999

  Relation between targeted industry and general economy

The past, current and future status of major economic indicators and their relations to the economy in a foreseeable period of time. What would be the likely state of the economy for the next few years? Relation between the targeted industry and t..

  Given the circumstance surrounding

a little more than 10 months ago, luke bought 300 shares of stock at $40 per share. Since then, the price of the stock has risen to $75 per share.

  Assume that a software organization is considering creating

assume that a software organization is considering creating a new software product. assume that the new software

  What is the selling price of gown

If her markup based on selling price is 78%, what is the selling price of each gown? (Round your answer to the nearest cent.)

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