What will be your net profit at share price at expiration

Reference no: EM131881120

The put on the Infosys share is selling with an exercise price Rs 3,400 at a premium of Rs 37.50 on 22 August 2002.

On the same day, the call is selling at a premium of Rs 32.50 with an exercise price of Rs 3,300. The spot price of the share is Rs 3,370.

The lot size is 100. What will be your net profit at share price at expiration ranging from Rs 3,200 to Rs 3,700 if you buy call with the exercise price of Rs 3,500 and buy put with the exercise price of Rs 3,300? Draw a profit graph.

Reference no: EM131881120

Questions Cloud

What is the benefit for using reflective practices : What is reflective practices and What is the benefit for using reflective practices in your work? Be specific and explain - Explain how you could implement

How would you assess the effectiveness of the team : The local cancer center has a health team designed to coordinate the care of children with cancer. The team is composed of a physician.

Environmental sustainability and economic sustainability : How would you describe the trade-off between environmental sustainability and economic sustainability?

Determine the depreciation expense for the first two years : The estimated life is five years and the salvage value is $3,000. Determine the depreciation expense for the first two years using the straight-line method.

What will be your net profit at share price at expiration : The put on the Infosys share is selling with an exercise price Rs 3,400 at a premium of Rs 37.50 on 22 August 2002.

How would you assess Kim as a leader : A faculty member, Kim Green from the Management Department, was asked to chair a major university committee to plan the mission of the university.

Uses two or more different channels of distribution : Give an example of a small business that uses two or more different channels of distribution. Discuss what problems this might cause.

Determine the amounts that beckman should report : Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income.

Discuss why using expected trends for the future : Discuss why using expected trends for the future can lead to different supply chain decisions relative to decision tree analysis that accounts for uncertainty.

User Account

All Pages