Create a delta neutral hedge

Assignment Help Business Management
Reference no: EM132726018

IBM stock currently sells for 84 dollars per share. The implied volatility equals 47.5. The risk-free rate of interest is 4.5 percent continuously compounded. If you owned a 100 shares of IBM stock with strike price 83 and maturity of 8 months, how many call options would have to buy (sell) to create a delta neutral hedge. Assume each option controls one share of IBM stock.

Reference no: EM132726018

Questions Cloud

Proposed fixed asset purchases : Capital budgeting is the process that a business uses to determine which proposed fixed asset purchases (or projects) it should accept
Discuss how an income statement budget could be created : Consider Birds Eye as a sample company, How an income statement budget could be created for a year starting with the sales budget through the SG&A budget.
Explain one key assertion at risk of not being valid : Describe why the account balance is at significant risk of material misstatement. Explain one, key assertion at risk of not being valid
How many units of each model must the company sell : How many units of each model must the company sell in order to break even? (Round Per unit values to 2 decimal places, e.g. 15.25 and final answers)
Create a delta neutral hedge : If you owned a 100 shares of IBM stock with strike price 83 and maturity of 8 months, how many call options would have to buy (sell) to create a delta neutral h
Discuss the tensions posed by global workforce trends : Briefly discuss the Tensions Posed by Global Workforce Trends and its interconnectivity to Diversity - specifically within the workplace
Big data and blockchain technology : There are several emerging concepts that are using Big Data and Blockchain Technology.
Calculate the assessed value of the property : Question - The property tax paid for a property at a tax rate of 0.754% is $5,239.31. Calculate the assessed value of the property
Compare the iot with regular internet : Compare the IoT with regular Internet. Discuss the potential impact of autonomous vehicles on our lives.

Reviews

Write a Review

Business Management Questions & Answers

  What is the difference between them

What are the main categories of anomaly detection methods and What is the difference between them?

  Overcome difficulties in meeting customer service

What are strategies and/or approaches that you could implement to monitor team performance to consistently meet the organisation's quality and delivery standard

  What type of firm or firms might be interested in acquiring

Some firms might find Uber to be an attractive acquisition candidate. Why would this be the case? What type of firm or firms might be interested in acquiring

  Write a business plan for a car rental office in dubai

Write a Business Plan for a Car rental Office in dubai. Car Rental Business Plan - Publicity and Advertising Strategy. Car Rental Business Plan - Sustainability and Expansion Strategy.

  Personal perspective paper

Write a reflection on what you learned from this project. Talk about things that surprised you, or beliefs you held that were confirmed.

  Consider a t distribution with 13 degrees of freedom

Consider a t distribution with 13 degrees of freedom. Compute P( t =-1.87)=

  What i found truly interesting here is bringing such a team

What I found truly interesting here is bringing such a diverse team of great people to a final solution that will make an impact to the organization that matters.

  Health care system in turmoil

Discuss why the current health care system is in turmoil. Identify two major problems of health care and analyze the impact of each of the chosen problems on consumers and the community. Describe the benefits and risks of national health insurance.

  Problems and the possible reasons for the problems

Identify the current problems and the possible reasons for the problems. (Use the background information and your assumptions about the situations to make conclusions. Describe the assumptions that you make.)

  Compare and contrast the phase of the business cycle

Compare and contrast the phase of the business cycle. Compare and contrast expansionary and contractionary fiscal policy.

  Definition of elasticity or exact calculation

You can do by either intuitive explanation based on the definition of elasticity or exact calculation total revenue, marginal revenue.

  Explain the impact of globalization on us businesses

Think about what you have read and seen in the news on globalization. Prepare a 4-6 page paper that explains the impact of globalization on U.S. businesses.

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