Calculate the straddle profit or loss

Assignment Help Finance Basics
Reference no: EM131951454

Question: You buy a straddle on SD whose exercise price on the call and the put is $20. The premium on the call option is $0.15, and the premium on the put option is $11.00. Calculate the straddle's profit or loss if just prior to expiration SD's stock price is $10 per share. The response must be typed, single spaced, must be in times new roman font (size 12) and must follow the APA format.

Reference no: EM131951454

Questions Cloud

Which instrument will you prefer and why : You can buy one bond today (Dec 31, 2016) issued by XYZ Inc with face value of $1000 and a coupon rate 8% payable quarterly and maturing on Dec 31, 2021.
Calculate the apr of a loan : Calculate the APR of a loan for $10,050, including loan fees of $320, at 11.5% for 3 years. (Do not round intermediate calculations).
Estimate the expected growth rate : Caballos, Inc., has a debt to capital ratio of 24%, a beta of 1.5 and a pre-tax cost of debt of 6%. The firm had earnings before interest and taxes.
Explain what is the nal : You can buy a steam press for your business at $5,000 or lease one for 6 months at $1,200 per month, with the first payment due today.
Calculate the straddle profit or loss : You buy a straddle on SD whose exercise price on the call and the put is $20. The premium on the call option is $0.15, and the premium on the put option.
What will the price of the bond be in given time period : You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i = 4% compounded once per year.
How much will the busness recieve from the bank : A busness accepted a note of 9000 plus 1000 service fee to be paid in 12 months. not along after the busness arranged for alocal bank tk purchase.
What is your return over the six months : You buy a 20-year bond with a coupon rate of 8.7% that has a yield to maturity of 9.7%. (Assume a face value of $1,000 and semiannual coupon payments.)
What is the risk-free interest rate : You buy a share of stock, write a 1-year call option with X = $45, and buy a 1-year put option with X = $45. Your net outlay to establish the entire portfolio.

Reviews

Write a Review

Finance Basics Questions & Answers

  Mcc schedule and the optimal amount of investment

What happens to the MCC schedule and the optimal amount of investment?

  Capital structure of cheng-davis development

The following information is available about the capital structure of Cheng & Davis Development (CDD).

  How much will his investment be worth

If his opportunity cost rate is 7 percent compounded annually, how much will his investment be worth after the last annuity payment is made?

  What is the value of alpha stock

After that, dividends are expected to grow at a 5% rate, indefinitely. If investors require a 10% return, what is the value of Alpha stock?

  The good life insurance co wants to sell you an annuity

the good life insurance co. wants to sell you an annuity which will pay you 730 per quarter for 25 years. you want to

  Decrease during business cycle expansions and increase

Risk premiums on corporate bonds are usually anticyclical; that is, they decrease during business cycle expansions and increase during recessions. Why is this so?

  Sector mutual fund or biotech exchange traded fund

If you invest your entire capital in a biotechnology sector mutual fund or biotech exchange traded fund (ETF) with 50 biotech stocks in each fund, then you would have eliminated all of the company-specific risks and your portfolio will be almost f..

  Calculate the irr of each project

Calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable.

  How much does a owe b

Payment of 9559 is due to software developers. How much does A owe B ?

  Someone making a scene in public

Write about a time you experienced someone making a scene in public, whether in a store, restaurant, medical office, etc.

  What is the present estimation of lakshmi limited

What is the present estimation of Lakshmi Limited's value, S0, and obligation, B0?

  What is the irr for project

Working capital will revert back to normal at the end of the project. If the tax rate is 35 percent, what is the IRR for this project?

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