Suppose you take the following position based on the current prices: purchase one share of stock, purchase TWO Put options, and sell/write one Call option. Using the table below, calculate the payoffs (values) AND profits from this investment strategy for stock prices ranging from $0 to $60. Use word file for answer. Do all calculation.Answer must be correct.
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Suppose you take the following position based on the current
to $60.
Use word file for answer. Do all calculation.Answer must be correct.
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- Create a butterfly. Select options suitable for a long butterfly strategy using options that expire within the next two months. List the options that would be suitable for this strategy. (1) Exercise price (2) Current stock price (3) Expiration date (4) Type (put or call) (5) Value of the optionBenjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest for the next 3 years. Below are the two options that he is considering putting his money into. Which of the following statements is true? NEED ASAP PLS. Benjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest for the next 3 years. Below are the two options that he is considering putting his money into. Which of the following statements is true? Bank A 5% Simple Interest Bank B 5% Interest Compounded Annually Simple Interest: /= Prt; Compound interest A=P(1+r): After 3 years, Bank B will pay Benjamin $1875 more than Bank B. After 3 years, Bank B will pay Benjamin $3000 more than Bank A. After 3 years, Bank B will pay Benjamin $1007.63 more than Bank A. After 3 years, Bank B will pay Benjamin $7.63 more than Bank A. After 3 years, Bank A will pay Benjamin $10.13 less than Bank B.An oil company is considering drilling in the Gulf at a current cost of $400,000 with an expected profit of $500,000 in three years. The current market rate of interest is 10 percent. Should the company make the investment? Multiple Choice No, the present value of the profit is less than the present value of the cost.. No, the future value of the profit is less than the present value of the cost. Yes, the present value of the profit is greater than the present value of the cost.. Yes, the future value of the profit is greater than the present value of the cost.
- Question A Call(50) = 9; Call(55) = 7; Put(50) = 7; Put(55) = 5. All options are on the same stock and have the same expiration time. Which strategy(s) yields arbitrage profit? A. Buy Call(50), sell Call(55) B. Sell Call(50), buy Call(55) C. Buy Put(50), sell Put(55) D. Sell Put(50), buy Put(55) E. Both A and C F. Both A and D G. Both B and C H. Both B and D . Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line.Our company is considering to start a new product. We must choose between 3 options. Use Excel to decide which option to choose (if any). o Option 1 costs $10,000 and will earn $2000 annually O Option 2 costs $15,000 and will earn $2750 annually Option 3 costs $20,000 and will earn $3500 annually O Let’Ms define the lifetime of the products as 30 years. In Excel, construct a table and graph of the 3 Present Worths versus interest rate Summarize in a table at which range one is preferred over the otherPerson A, Person B and Person C own stock in the same company. All of them are loss averse and have the same value function: v(x) = x/2 for gains and v(x) = 2x for losses. The stock's price is shown in the graph below Stock Price 100 90 80 95 80 90 70 70 60 60 50 50 40 30 20 10 0 October November December January Feburary March (a) (b) O Person A bought the stock in November and uses the purchase price as their reference point. If you ask them, how much would they say that they lost in terms of value when the price dropped from £95 to £70? Person B bought the stock in October and uses the peak price as their reference point. If you ask them, how much would they say that they lost in terms of value in January? In January, which month should Person B rather use as reference point in order to maximize their value? (d) [ Person C bought the stock in March. They expect to derive a value of at least +5 in April as compared to their reference point of the purchase price. What is the minimum…
- you are cattle feeder concerned abount rising corn (and feed ) cost . the march contract is trading at $ 4.29/bu. during the month of january and february , you expect to be able to buy corn at basis of$ -0.28/bu. you buy the march contract the look in price corn . when the time comes to unwind your hedge, the following prices prevail : $4.94/bu march futures and $4.69/bu cash price. what price did you ectually pay for corn? (a) $4.69/bu (b)$ 4.01/bu (C)$ 4.94/bu (d)$ 4.16/buAfter graduation, you face a choice. One option is to work for a multinational consulting firm and earn a starting salary (benefits included) of $40,000. The other option is to use $7,000 in savings to start your own consulting firm. You could earn an interest return of 7 percent on your savings. You choose to start your own consulting firm. At the end of the first year, you add up all of your expenses and revenues. Your total includes $10,000 in rent, $1,000 in office supplies, $24,000 for office staff, and $3,500 in telephone expenses. Explicit costs include all costs for which direct payments are made Rent ($10,000), office supplies ($1,000), staff salaries ($24,000), and telephone ($3,500) = $ Implicit costs include opportunity costs: foregone wages ($40,000), and foregone interest payments ($7,000x7%) = $ Suppose, that you have now operated your consulting firm for a year. At the end of the first year, your total revenues are $78,000 Your accounting profit is $ Your economic…After graduation, you face a choice. One option is to work for a multinational consulting firm and earn a starting salary (benefits included) of $40,000. The other option is to use $6,000 in savings to start your own consulting firm. You could earn an interest return of 5 percent on your savings. You choose to start your own consulting firm. At the end of the first year, you add up all of your expenses and revenues. Your total includes $9,000 in rent, $850 in office supplies, $18,000 for office staff, and $3,500 in telephone expenses. Your explicit costs are $ Your implicit costs are $
- Ashraf wants to buy a car for which he has been saving and investing in a bank an amount of OMR. 1000 each year for 10 years. He is willing to withdraw and buy a new car today. What amount will he receive assuming an interest rate of Option a : 7% Option b: 9%? Select one: O a. Option a: 5499.70 Option b: 6983.05 O b. Option a: 7023.58 Option b: 6417.65 O c. Option a: 4087.29 Option b: 6235.20 O d. Option a: 6487.80 Option b: 6157.082. Thomas is considering buying an artificial Christmas tree. The tree costs $285 and is expected to last six years. The alternative is to keep purchasing natural trees, which currently cost $35 (Christmas year 0) and are expected to increase $5 in price each of the subsequent years, e.g. +$40, +$45, +$50, etc. Note: Draw two cash flow diagrams for this problem. a. What decision would you advise regarding the two options? b. What additional information may be useful or necessary in order to make a decision? c. Which option is the better choice? Why?Only typed answer Assume the correlation of returns between KO and the market portfolio equals 0.80, the standard deviation of KO equals 0.60, and the standard deviation for the market portfolio equals 0.30. What is the beta for KO.