Write to effectively hedge your portfolio

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1. BB Industries receives an invoice dated November 18 for $2,250.00 with credit terms of 3/15, 2/25, N/45. A 5 1/4% penalty is charged for payments made after 45 days. Assuming payment is made on January 3, the amount due is:

a. $2,250.00

b. $2,368.13

c. $2,205.00

d. $2,182.50

e. None of the above

2. You have an equity portfolio valued at $1.55 million that has a beta of 1.21. You have decided to hedge this portfolio using SPX call option contracts. The S&P 500 index is currently 1457. The option delta is .6435. How many option contracts must you write to effectively hedge your portfolio?

18 contracts

20 contracts

28 contracts

25 contracts

14 contracts

Reference no: EM131315792

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