Construct a bull spread using just the call options

Assignment Help Mathematics
Reference no: EM131840894

Stock XYZ is trading today at $50, and pays no dividends. The effective 3 month interest rate is 0.25%. All options are European style and expire in 3 months.

Option type Strike Bid Ask

Call 45 6.75 7.00

Put 45 1.70 1.80

Call 55 2.15 2.25

Put 55 6.90 7.15

Construct a bull spread using just the call options and draw its profit diagram at option expiry.

Construct the same bull spread using just put options and draw its profit diagram at option expiry.

Don't forget to take interest rates and bid/ask prices in to account.

Reference no: EM131840894

Questions Cloud

Find the average rate of change for the following function : Find the average rate of change for the following function: f(x)= 5x^3 - 4x^2 + 3 between x = -1 and x = 1
Explain what did you like and what did you find challenging : Explain what did you like and what did you find challenging? What elements of the argument, on both sides, did you find unconvincing?
Find the probability that 4 cars are red and the rest : A car dealership has 6 red, 10 silver, and 5 black cars on the lot. Ten cars are randomly chosen to be displayed in front of the dealership.
What is our maximum gain and at what stock price : What is our maximum loss and at what stock price does it occur? What is our maximum gain, and at what stock price?
Construct a bull spread using just the call options : Stock XYZ is trading today at $50, and pays no dividends. The effective 3 month interest rate is 0.25%. All options are European style and expire in 3 months.
Describing the theories of aging : Which of the theories of aging presented to you so far do you feel makes the most compelling argument? Why? Use examples drawn from your own experiences.
Develop a research proposal consisting of three sections : Develop a research proposal consisting of three sections. What is the controversy? Include paragraphs that detail both sides of the controversy.
How fast would sam have to run to be john : During that 300 m, he covers at a speed of 4.6 m/s. How fast would Sam have to run to be John?
Find the intersection of e and b : Find the intersection of E and B. Find the union of E and B. Write answers using set notation (in roster form).

Reviews

Write a Review

Mathematics Questions & Answers

  How many samples will contain at least one defective board

Suppose that three computer boards in a production run of forty are defective. A sample of five is to be selected to be checked for defects.

  A randomly selected full-grown adult female okapi weighs

The weights of full-grown adult female okapis are normally distributed with a mean of 500 pounds and a standard deviation of 30 pounds. What is the probability that

  Use augmented matrices

Use augmented matrices

  Find the slope of the tangent line

find the slope of the tangent line to the give polar curve at the point specified by the value of theta

  What is the ball''s velocity at this time

A ball is thrown directly downward with an initial velocity of 8 m/s from a height of 30 m.

  Waters in a circular pattern

1. To the nearest square foot, what is the area of a circular rose garden that measures 28 feet through the center? 2. A sprinkler waters in a circular pattern, spraying water out a distance of 3.1 meters. How much lawn surface does the sprinkler w..

  Academic response to linear equations

Why is it true that any two points satisfying a linear equation will give you the same graph for the line represented by the equation?

  A maintenance group aims to improve the effectiveness

A maintenance group aims to improve the effectiveness of its repair work. The group therefore monitors the number of maintenance requests that require a second visit to complete the repair. On any given week the maintenance group responds to 20..

  How many valid strings are there

Math 10B Quiz 1. We say that a string of five decimal digits is valid if it satisfies both of the following two conditions: At least one of the five digits is a "0". The five digits are all distinct. How many valid strings are there

  Writing a greatest common divisor as a linear combination

Finish the proof of Theorem by proving that if a, b and c are as in the proof, then c | b.

  Euclidean-non-euclidean geometry

Discuss differences between neutral geometry and Euclidean geometry. Explain the importance of Euclid's parallel postulate and how this was important to the development of hyperbolic and spherical geometries.

  There are 14 standbys who hope to get seats on a flight

there are 14 standbys who hope to get seats on a flight but only 6 seats are available on the plane. how many

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