European call options on gold futures

Assignment Help Financial Management

Reference no: EM131298179

What is the delta of a short position in 4 thousand European call options on gold futures? The options mature in eight months, and the futures contract underlying the option matures in 9 months. The current nine-month futures price is $10 per ounce, the exercise price of the options is $10, the risk-free interest rate is 14% per annum, and the volatility of gold is 25% per annum..

Please explain better than previous same question answers.

Reference no: EM131298179

Questions Cloud

What was the annual increase in selling price : Assume that in January 2013, the average house price in a particular area was $285,400. In January 2002, the average price was $202,300. What was the annual increase in selling price?

How long will it be before you have enough to buy car : You're trying to save to buy a new $192,000 Ferrari. You have $42,000 today that can be invested at your bank. The bank pays 5 percent annual interest on its accounts. How long will it be before you have enough to buy the car?

What is the yield to maturity : A STRIPS has a $9,000 par value and a market value of $7,050. The time to maturity is 5 years. What is the yield to maturity? What is the present value of your windfall if the appropriate discount rate is 10 percent?

Featured in a famous novel sold at auction : A coin that was featured in a famous novel sold at auction in 2014 for $6,788,000. The coin had a face value of $5 when it was issued in 1790 and had previously been sold for $280,000 in 1967. At what annual rate did the coin appreciate from its firs..

European call options on gold futures : What is the delta of a short position in 4 thousand European call options on gold futures? The options mature in eight months, and the futures contract underlying the option matures in 9 months. The current nine-month futures price is $10 per ounce, ..

What is the expected rate of return on the market portfolio : Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 6%. Suppose also that the expected rate of return required by the market for a portfolio with a beta of 1 is 14%. According to the capital asset prici..

Two mutually exclusive investment opportunities : You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $9.8 million. Investment A will generate $1.84 million per year? (starting at the end of the first? year) in perpetuity. Investment ..

Current competitive market exchange rates : You are an international shrimp trader. A food producer in the Czech Republic offers to pay you 2.4 million Czech koruna today in exchange for a? year's supply of frozen shrimp. Your Thai supplier will provide you with the same supply for 3.1 million..

What is the present value of the difference in the benefit : A vintner is deciding when to release a vintage of sauvignon blanc. If it is bottled and released? now, the wine will be worth $2.4 million. If it is barrel aged for a further? year, it will be worth 25?% ?more, though there will be additional costs ..

User Account

All Pages