What would be the result in each case at expiry

Assignment Help Finance Basics
Reference no: EM132538759

You buy one stock of ABC at $50 and buy one put option on the same stock ABC @ $2 per put option and sell one Call option on the same stock @ $2 . The strike price/ exercise price for both Put and Call is $ 45. What would be the result in each case at expiry if stock closes above $ 45 or below $ 45.

Reference no: EM132538759

Questions Cloud

Describe the five most serious risks facing the company : As part of the process, they must issue a prospectus, which includes a summary of the key risks facing the company.
What is the projects npv for babcock inc : Babcock Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Enter your answer rounded
Design a circuit that performs the logical function : Design a circuit that performs the logical function - achieve a result with small area within the timing restrictions. Determine the area
Teetered on the edge of unethical : How would you handle a situation that teetered on the edge of unethical, but was not against company policy?
What would be the result in each case at expiry : What would be the result in each case at expiry if stock closes above $ 45 or below $ 45.
Find what is high growth standard deviation of return : What is High Growth's standard deviation of return? answer should be rounded to two decimal places. High Growth's annual stock returns over the last 7 years
Calculate the total present value of mi with leverage : Suppose that MI has zero-coupon debt with a $140 million face value due next year. Calculate the total present value of MI with leverage.
Determine the valuation premise consistent : Determine the asset or liability that is the subject of measurement. Determine the valuation premise consistent with the highest and best use.
Compute the price of a pure discount bond : Compute the price of a pure discount bond maturing on 12/31/99, with $1,000 face value.

Reviews

Write a Review

Finance Basics Questions & Answers

  What two actions should the campus organization take

A campus service organization annually raises money through the sales of T-shirts. Using what you have learned about marketing and scanning the marketing environment, what two actions should the campus organization take.

  Sles of 2000000 and had 100000 shares of common stock

jb corporation has a retained earnings balance of 1000000. the company reported net income of 200000 sales of 2000000

  What is the yield to maturity of bond

A Japanese company has a bond outstanding that sells for 87 percent of its ¥100,000 par value. The bond has a coupon rate of 4.3 percent paid annually

  What is the variance of these returns

Over the past five years, a stock returned 8.3 percent, -32.5 percent, -2.2 percent, 46.9 percent and 11.8 percent. What is the variance of these returns?

  Calculate the expected capital gains yield

What is the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

  Penguin pucks inc has current assets of 7000 net fixed

penguin pucks inc. has current assets of 7000 net fixed assets of 25800 current liabilities of 6600 and long-term

  Importance of the risk and return balance

Reflect on the importance of the risk and return balance. Can we ever have any return without some type of risk?

  Turner corp has debt of 230 million and generated a net

turner corp. has debt of 230 million and generated a net income of 121 million in the last fiscal year. in attempting

  What is the effective or net cost of the large press

Asset acquisition decision Zarin Printing Company is considering the acquisition of Freiman Press at a cash price of $50,000.

  What would be prof fin monthly mortgage payment

What would be Prof. Fin's monthly mortgage payment if he pays the closing costsin cash?

  Calculate estimated forward rate between the currencies

The spot exchange rate for the Thai bhat is 30.000 bhat to the dollar or .00333 dollar to the bhat. For capital budgeting purposes, Ramo Corp needs to estimate.

  All sales are estimated to be bad debts

Farris estimates that it will collect 30% in the month of sale, 50% in the month after the sale, and 18% in the second month following the sale. Two percent of all sales are estimated to be bad debts. How much are Farris Co.'s budgeted cash rec..

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