Potential gains-losses at option expiration for stock prices

Assignment Help Financial Management

Reference no: EM131874682

1. Noncallable bonds that mature in 5 years were recently issued by Sternglass Inc. They have a par value of $1,000 and an annual coupon of 5%. If the current market interest rate is 5%, at what price should the bonds sell?

2. The current price of a stock is $47, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $64 sells for $8.6. What is the value of a put option, assuming the same strike price and expiration date as for the call option?

3. Suppose you write 26 put option contracts with a $80 strike. The premium is $2.40. Evaluate your potential gains and losses at option expiration for stock prices of $70, $80, and $90. (Input all amounts as positive values.)

Reference no: EM131874682

Questions Cloud

What are the three stages of jury selection : Victim input in plea bargaining: read about the state of law as it concerns victim input into plea bargaining and give a summary.

Dollar weighted and time weighted rates of return : If the dollar weighted and time weighted rates of return were the same, what is the rate of return?

Difference between the definition of a prokaryotic : Explain the difference between the definition of a prokaryotic species and a eukaryotic species

When is a javascript constructor called : When is a JavaScript constructor called? What is the difference between a constructor in Java and one in JavaScript?

Potential gains-losses at option expiration for stock prices : Evaluate your potential gains and losses at option expiration for stock prices of $70, $80, and $90.

What is an undifferentiated strategy : What is an undifferentiated strategy? Under what conditions is it most useful? Describe a present market situation in which company is using an undifferentiated

Describe the operation of the prompt method : What is the usual end-of-line punctuation for the string operand passed to alert? Describe the operation of the prompt method.

Prevent or reduce incidence vibrio cholerae : What steps could be taken to prevent or reduce incidence Vibrio cholerae?

Describe the purpose and characteristics of nan : Describe the purpose and characteristics of NaN. Why is parseInt not used more often? What value does type of return for an object operand?

User Account

All Pages