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Question -
1. Suppose that you entered into a cash-and-carry like arrangement where you agreed to sell 10 shares of Apple through a forward contract, where the forward price is the agreed upon price. To hedge the sale, you use the futures arrangement from the previous problem. What is your profit?
Use the table of call and put values on some underlying asset to determine the payoffs described in the problem below.
Strike
Call
Put
40
8.97
3.25
50
4.81
8.10
2. You buy 1 strike 40 call, 1 strike 40 put, and 3 strike 50 calls. Additionally, you write 2 strike 50 puts.
a) What is your payoff if the price at expiration is 55?
b) What is your payoff if the price at expiration is 45?
c) Assume that there is a fee of 2% charged to any buyer. The proceeds go to a broker. All options expire in 1.5 years, and the risk free rate if 5%, compounded continuously what is the profit if the price at expiration is 45?
Why are limit orders more aggressively priced under the uniform pricing rule than the discriminatory pricing rule? Which pricing rule is more preferable ?
Lisa Simpson wants to have $1,100,000in 50years by making equal annual end-of-the-year deposits into a tax-deferred account paying 11.75 percent annually. What must Lisa's annual deposit be?
Companies U and L are identical in every respect except that U is unlevered while L has $9 million of 6% bonds outstanding.
A firm's dividends have grown over the last several years. 4 years ago the firm paid a dividend of $1. Yesterday it paid a dividend of $7.
How would you recognize potential risk involved with innovation and what would you do to minimize it?
Alfa is a start-up company who is using all its cash to growth so it does not plan to pay dividends for the next 4 years.
Assume you want to retire at age 65, using the age you are now, and haven't saved anything, but think you can get a return of 8% on your investments.
1.nbspnbspmerger gains and cost sometimes the stock price of a possible target company rises in anticipation of a
Write out the firm's new balance sheet? What is the firm's new stock price?
(Thee, and Zhong2008) surveyed under graduate college students to examine their weight status, health behaviors, and diet. Using body mass index, they classified the students into four categories: underweight, healthy weight, overweight, and obe..
the devlin corporation a diversified distribution company purchases cartons of canned tennis balls from the questor
Would the globalization of production and markets have been possible without these technological changes? How does technology create global opportunity?
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