What will be the payoff of the put and profit of the put

Assignment Help Financial Management

Reference no: EM131979019

Assume that you own a put option on Zereta stock with a strike price of $26. When you bought the put, its cost to you was $4.0. The option will expire in exactly six months’ time. (Show your calculations)

a. If the stock is trading at $36 in six months, what will be the payoff of the put? What will be the profit of the put?

b. If the stock is trading at $16 in six months, what will be the payoff of the put? What will be the profit of the put?

Reference no: EM131979019

Questions Cloud

Is workplace bullying an endemic part of workplace culture : Is workplace bullying an endemic part of workplace culture? Discuss with reference to existing Australian legislation?

Discuss three visual aids : Discuss (which is more than just listing) three visual aids that you can use in your sales presentation and how you would actually use them.

Compute the company deferred income tax expense or benefit : Harrison Corporation reported pretax book income of $735,000. Tax depreciation exceeded book depreciation by $605,000. In addition, the company received.

Name the 5 sources of power : 1. Name the 5 sources of Power? 2. Name 5 Solutions to Corruption.

What will be the payoff of the put and profit of the put : If the stock is trading at $16 in six months, what will be the payoff of the put? What will be the profit of the put?

Cross-departmental or cross-function team : What conflict resolution techniques would be the most effective in a cross-departmental or cross-function team? How would you alter these techniques.

What amount must kelley have accumulated : Harold and Maude Kelley currently are planning for retirement. They feel the will need to receive a payment of $50,000 at the beginning of each year for 20 year

What position should the firm take to hedge its liability : what is the interest rate the firm can lock in if it hedges liability using Eurodollar futures? what position should the firm take to hedge it’s liability?

Derive an expression for the transfer function : For the high pass filter design - Derive an expression for the transfer function showing all steps. Determine the 3 dB cut off frequency in terms of R and C

User Account

All Pages