Calculates payoffs from buying call

Assignment Help International Economics
Reference no: EM1368064

1. Ms. Smith longs 1 XYZ Feb. 40 Call @ 3 and hold it it to expiration. Suppose no transaction costs, Examine this investment in terms of possible profit or loss. Make a payoff diagram.

2. Ms. Smith writes 10 BETA Jan. 40 put @ 4. The put is exercised when the stock is trading at 38. Ms. Smith immediately sells the stocks in the market. What is Ms. Smiths profit or loss?

3.Ms. Smith writes 10 KLP Dec. 55 call @ 5, uncovered. The call is excersized when the stock is trading at $58. What is Ms. Smiths profit or loss?

4. In Dec. 16 an investor buys 1 ALFA Feb 60 call @ 3 1/2. In January 10th ALFA share closes at $63. What is the intrinsic value of the call? What is its time value?

5. Ms. Smith shorts 1 XYZ Feb. 40 Call @ 3 covered. She purchases XYZ for $30 a share. Assuming no transaction costs, analyze this investment in terms of possible profit or loss. Draw a payoff diagram.

6. Suppose you have the following positions
Long 10 CDE Jan. 50 call @ 3
Long 10 CDE Jan. 50 put @ 4

Analyze this investment in terms of possible profit or loss. Draw a payoff diagram.

 

Reference no: EM1368064

Questions Cloud

Examine production function : Compute the marginal product of labor when 9 units of labor are utilized. Assume the firm can hire labor at a wage of $10/hr and output can be sold at a price of $100 per unit. Determine the profit maximizing levels of labor and output.
What is the maximum power provided by brakes : Assume the car is moving at 72 km/hr when the brake pedal is applied. Assume that the radius of the wheel is 15 cm. What is the maximum power.
Show the grad level econmic problems : When the price of butter was "low," consumers spent $5 billion annually on its consumption. When the price doubled consumer expenditures increased to $7 billion.
Effectiveness of complementary medicine : A nurse researcher wants to study the efficiency of complementary medicine such as acupuncture or yoga for the treatment of post traumatic stress disorder.
Calculates payoffs from buying call : Ms. Smith longs 1 XYZ Feb. 40 Call @ 3 and hold it it to expiration. Suppose no transaction costs, Examine this investment in terms of possible profit or loss. Make a payoff diagram.
Find the magnitude and direction of object : An ion harvester is scouring deep space for isolated xenon (Xe+) ions. A xenon ion is singly ionized and has the charge of +e. If the field meter reads 0.000000202 N/C, how far away is it from the ion.
Consumer charges : Do you believe that every consumer pays hidden or unanticipated charges for the things that they buy? High interest rates on unpaid balances?
Managment collaboration technologies : Provide at least one example of a technology which is AND is not appropriate for each condition. For example, in considering task, consider what types of tools are appropriate/inappropriate for different types of team tasks and why.
Credibility and reliability of sources of cam information : Make a methodology for assessing the credibility and reliability of sources of the CAM information.

Reviews

Write a Review

International Economics Questions & Answers

  Calculate the post-merger eps

Alu City is a manufacturer of aluminum products for building industry and has experienced a high growth rate due to an increased demand. The corporation shares are currently being traded at 410 cents each share.

  Consider two countries that share the same technology

Consider two Countries that share the same technology, South Africa and the UK, and two goods, Diamonds and Tea

  Determine the models used in economics

The problem of estimating what goods and services society should produce,  Determine the models used in economics

  Determine the effects on the exchange rate

Using demand and supply analysis to assist you, determine the effects on the exchange rate between the British pound and the Japanese yen from:

  Determine purchasing power parity

If the average price of goods in Europe increase from 100 in year 2000 to 130 in year 2010. If the average price of goods in the U.S. rises from 120 in year 2000 to 140 in year 2010.

  Determine the equilibrium income and interest rate

Assume foreign income rise to 108,000 and interest rate is allowed to temporarily diverge from world economy interest costs. What are the equations for IS and LM curves?

  Reducing observations by changing the moving average window

Information covering the most recent thirty days are given in the following table for the value per gallon of regular gasoline at a local station.

  Question on relative ppp

Suppose that the inflation rate in the United State and japan are 4 percent and 2 percent, respectively and that the current spot rate is $.0083333 per Japanese yen or 120 Japanesse yen per one percent dollar.

  Wage difference in mexico and united states

Ross Perot added his memorable "insight" to the debate over the North American Free Trade Agreement when he warned that passage of NAFTA would make a "giant sucking sound" as United State employers shipped jobs to Mexico,

  Calculate the quantity of us demand

One type of toy bears is in China and exported to the United State A toy bear sells for sixteen Yen in China. The exchange rate of Chinese yen and US dollars is $1 = 8 Yen.

  Change in exchange rates

In September 2003, a United State retailer wants to buy canola oil from a Canadian farm. At that time in Canada, one barrel of canola oil value C$2.

  Maintaining an acceptable level of risk

As a treasurer of a large United State corporation, you must decide how best to manage the company's cash flows to maximize profits, subject to maintaining an acceptable level of risk.

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