What are the break-evens

Assignment Help Finance Basics
Reference no: EM133123094

Elijah believes that the SP500 will be relatively stable over the next month. The current spot is 3930. He sells a strangle: selling a put with a strike of 3710 and selling a call with a strike 4030. The quotes are 10 dollars for each of them. Thus the premium is quoted as 20 in aggregate. Each SP500 options contract is priced 100xIndex.

On a per contract basis, what are the break-evens, best cases and worst cases, and when do the worst and best cases occur?

Reference no: EM133123094

Questions Cloud

How much interest will have been earned : Suppose he leaves the accumulated contributions for another 6 years in the RRSP at 3.4% compounded monthly. How much interest will have been earned
Discuss the procedures for the preservation of evidence : Discuss the procedures for the preservation of evidence; be sure to connect this work with the chain of custody. Describe consequences
What is the yield on this 5-year corporate bond : What is the yield on this 5-year corporate bond? Round your answer to two decimal places.
What amount be reported as appropriated retained earnings : Nancy Company issued 200,000 shares of P5 par value at P10 per share. What amount should be reported as appropriated retained earnings at year-end
What are the break-evens : On a per contract basis, what are the break-evens, best cases and worst cases, and when do the worst and best cases occur?
What is the effective annual rate : Q1. Royal International Bank (RIB) charges an interest rate of 1.25% per month on loans to its customers. Like all lenders, RIB must report an annual percentage
What effective rate of interest does his saving account have : Peter wants to save $2,600 in nine months by depositing $860 at the end of every three months into a savings account. What effective rate of interest does have
What is the present value of liability : Imprudential, Incorporated, has an unfunded pension liability of $700 million that must be paid in 20 years. To assess the value of the firm's stock, financial
Assignment on bootstrapping : Definition: To finance your company's startup and growth with the assistance of or input from others

Reviews

Write a Review

Finance Basics Questions & Answers

  Is the action acceptable in the given case

Do you think that the employees should take the action suggested by their boss? Suppose the action is prohibited by Bedron's code of ethics.

  Find the expected price of the bond

All interest rates are annual interest rates with semi-annual compounding. All coupon rates are annual rates paid semi-annually. All bonds have a $100 face valu

  How is this accomplished

Laura, a bond portfolio manager, administers a $10 million portfolio. The portfolio currently has a duration of 8.5 years. Laura wants to shorten the duration to 6 years using T-bill futures. T-bill futures have a duration of 0.25 years and are tradi..

  Write a report detailing the risks and potential benefits

You work for a company with no international experience that has an efficient production method for small engines. - write a report detailing the risks and potential benefits of this deal.

  Calculate how many canvases anke needs to sell

Breakeven analysis Anke Perks is opening an arts and crafts store that focuses on canvases, paints, and pencils. The selling price of a canvas is $24.

  What should be the price of a share of weyland yutani

The firm's shareholders have a required rate of return of 14.2% and its dividends are forecast to grow at 5.43% forever. What should be the price of a share

  Total assets turnover ratio

Austral & Company has a debt ratio of 0.5, a total assets turnover ratio of 0.25, and a profit margin of 10%

  What is the expected price of the stock in given case

Mega stock is expected to grow at 11% in year 1 and year 2, 10% in year 3, 8 % in year 4 and then grow at a constant rate of 4% in the years that follow.

  What are the top ratio used in ratio analysis

What are the top 7 ratio used in ratio analysis (list in order from most important), define them and their formula and Also, list 5 industry averages ratios.

  Determine the base-year annuity payment

After you have paid your last installment on your 65th birthday, you learn that medical advances have shifted actuarial tables so that you are now expected to live to age 85. Determine the base-year annuity payment supportable under the 4 percent ..

  Describe the concept of integrative trade

Describe and discuss the difference between a high-context culture and a low-context culture. Provide an example of each

  Calculate the price of an option

Calculate the price of an option that caps the three-month rate, starting in 15 months' time, at 13% (quoted with quarterly compounding) on a principal amount of $1,000.

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