Value of the underlying asset

Assignment Help Finance Basics
Reference no: EM132477745

Suppose that you have taken a long position on a put option. The strike price is $125, and the option premium / price is $10. When the option expires, the value of the underlying asset is $90. What is your pay-off and profit / loss?

Reference no: EM132477745

Questions Cloud

Identify two areas of portfolio that need to be strengthened : Identify two areas of your portfolio that need to be strengthened: either aspects of your portfolio or areas of professional competence related to prevention
What is the value of a right : (a) What is the value of a right? (b) What is the stock price the day the stock goes right-off.
How can organizations demonstrate social responsibility : Discuss one specific challenge and one specific benefit of both technology and social media related to social movements and change in the 21st century.
How will you immediately apply your problem solving skill : As a result of this class, how will you immediately apply your problem solving skill at home or work? As a result of this class, how have you grown in terms.
Value of the underlying asset : When the option expires, the value of the underlying asset is $90. What is your pay-off and profit / loss?
What is the patient responsibility amount : What is the patient responsibility amount, discount amount, and the amount the carrier pays?
How awareness of social issue benefits society workplace : Determine if there are any social media implications related to this social issue. How is this social issue portrayed on social media and in the media?
Shareholders of the company and not the bond holders : Treasury-bills in the United States are financial instruments initially sold by the United States government and agencies of the federal government
Define how to effectively balance social roles : Chapters 13 and 14 in the course textbook examine the impact of social roles and professional life on adult development. In our complex world that requires us.

Reviews

Write a Review

Finance Basics Questions & Answers

  Write clients personal and financial position

How to write clients' personal and financial position as well as risk profile? What kind of information should i include in my report.

  Firm as compared to the purchase of separate policies

b. Explain the advantages of a commercial package policy to a business firm as compared to the purchase of separate policies.

  What is the irr

What is the IRR and if the required rate of return is 14%, should the project be accepted?

  Investor annual percentage rate of return

Over the past year, the stock has enjoyed a 20 percent return in pound terms, but over the same period, the exchange rate has fallen from $2.00 = £1 to $1.80 = £1. Calculate the investor's annual percentage rate of return in terms of the U.S. doll..

  Evaluate proposed launch using standard discounted cash flow

Evaluate the proposed launch using a standard discounted cash flow approach. How should the committee address the issue of which discount rate to use

  What will its dividend payout ratio be

If the company follows the residual dividend model, how much income must it earn, and what will its dividend payout ratio be?

  What is the fair market value of the project

Suppose the software development project grows at a steady growth rate of 2% after year 5. What is the fair market value of the project

  How much cash would be freed-up

Its cost of goods sold is 75% of sales, and it finances working capital with bank loans at an 8% rate. Assume 365 days in year for your calculations.

  What is the project npv using a discount rate

What is the project's NPV using a discount rate of 8 percent? Should the project be accepted? Why or why not? What is the project's NPV using a discount rate.

  The process of asset transformation performed by a financial

1 What is the process of asset transformation performed by a financial institution? Why does this process often lead to the creation of interest rate risk? What is interest rate risk?

  Valuing preferred stock

A firm has an issue of preferred stock outstanding that pays a $2.6 dividend every year in perpetuity. If the required return is 10.44 percent

  What is the required retention rate that must be achieved

Assume that Shannon's decides to move forward with its loyalty/rewards program. Estimates for the cost per customer are $4.79 per month.

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