What is your profit or loss

Assignment Help Financial Management

Reference no: EM131452624

Delta stock (DAL) is trading at $11.70 today. Consider an American put option on 1 share of DAL with strike K = 12 and expiration in T = .25 years. The put is selling today for $1.46. Assume the risk-free rate is 1%. 1 month later, the put option is trading at $0.85. so you decide to sell your put option. What is your profit or loss?

Reference no: EM131452624

Questions Cloud

Determine the price of the stock : Determine the price of the stock that is currently paying a $1 dividend and has a discount rate of 17% by using:

What is default risk premium on the corporate bond : Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?

What is the yield on two year treasury securities : The real risk-free rate is 2.75%. Inflation is expected to be 2.25% this year and 4.5% during the next 2 years. What is the yield on 2-year Treasury securities?

Real risk-free rate : Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums:

What is your profit or loss : Assume the risk-free rate is 1%. 1 month later, the put option is trading at $0.85. so you decide to sell your put option. What is your profit or loss?

How long will it be until you run out of money : You are retired, have 264,500 in your savings, withdraw 2000 each month and earn 4.5 percent, compounded monthly. How long will it be until you run out of money

What are the business and spiritual benefits of planning : what are the business and spiritual benefits of planning? What does it mean to be a good steward? Of what resources have you been given charge?

What is the weighted average cost of this capital : however, they have a few investors that are interested in lending money for this venture. What is the weighted average cost of this capital (WACC)?

Cost associated with electronic health record software : Bookmark Assume that the cost associated with the purchase of electronic health record software are as follows:

User Account

All Pages