User Account

All Pages

Calculate the value of the portfolio

Assignment Help Finance Basics
Reference no: EM132516315

A trader has the following portfolio:

1. Long 1-year put with strike $80

2. Short 1-year call with strike $120

3. Long 1 share of stock. (Option contracts are for 1 share).

Assume that the price of the underlying asset is $100. Volatility is 20%, rate=1%, dividend yield 0%.

a. Calculate the value of the portfolio.

b. What would be the maximum gain that the trader could incur in a month? Explain how.

c. What would be the maximum loss the trader could have in 1 month? Explain.

Reference no: EM132516315

Questions Cloud

Calculate the total number of units to account : 4,000 units during the month and transferred them to the Packaging Department. Calculate the total number of units to account for by the Assembly Department.
Determine the ordering, holding, and total inventory costs : Determine the ordering, holding, and total inventory costs for that order quantity and How many orders will be placed per year using the optimal order quantity
Design a model to store data for your application : You are going to design a model to store data for your application with the following specification: E-R diagram for all possible classes you use in project
Find the cost per equivalent unit of production : The equivalent units of production for direct materials and conversion costs are 1,500 and 800, respectively. The cost per equivalent unit of production (EUP
Calculate the value of the portfolio : a. Calculate the value of the portfolio. b. What would be the maximum gain that the trader could incur in a month? Explain how.
What will be the effect of the error on net income : Johnson corporation mistakenly overstates cost of goods sold by $52,000. What will be the effect of this error on Net Income for 2017? Assume a tax rate of 0%.
Reward measure for top managers at a company : Economic Value Added as a reward measure for top managers at a company? explain what is Economic Value Added and how it works.
What the amount is included in inventory : If the cost of an item of inventory is $50 and the current replacement cost is $57, the amount is included in inventory according to lower of cost or market is

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money 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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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