What is the profit from the position

Assignment Help Finance Basics
Reference no: EM131971906

Question: You expect the price of GE to not change very much in the next month, so you go short on (sell) a straddle (a put and a call at the same strike) on 100 shares of GE, with a strike price of $21.4. The premiums on the put and the call are each $0.82. If the price at maturity is $22.6, what is your profit from this position?

Reference no: EM131971906

Questions Cloud

What exchange rate does that imply between the two currency : Loonie Parity. If the price of former Chairman of the U.S. Federal Reserve Alan Greenspan's memoir.
Prepare any journal entries for depreciation of equipment : Rohan Company purchased equipment in January 2008 for $8,000,000. Prepare any journal entries for the depreciation of the equipment at December 31, 2011.
Marginal revenue product of second unit of labor : If the firm can sell 12 units of its product at $1.00 per unit and and 21 units at $0.80 per unit, what is the marginal revenue product of the second unit of la
What is your high target stock price over the next year : If you look at stock prices over any year, you will find a high and low stock price for the year.
What is the profit from the position : You expect the price of GE to not change very much in the next month, so you go short on (sell) a straddle (a put and a call at the same strike).
Calculate the current annual rate of return on instrument : Calculate the current annual rate of return on this instrument and compare it to the annual rate of return you were expecting.
Journalize the entries to record the preceding transactions : Journalize the entries to record the preceding transactions. Prepare the investment-related asset and stockholders' equity balance sheet disclosures for roman.
Explain the concept of the fama-french model : The expected premium on small stocks relative to large stocks is 6%, and the expected risk premium on low book-to-market stocks relative to high book-to-market.
Example of absolute and comparative advantage : Give an example of absolute and comparative advantage. Explain how this is linked to the economic belief that all countries can benefit from trade.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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