Expiration date and the same exercise price

Assignment Help Finance Basics
Reference no: EM132235016

You currently have a long position on a straddle. A long straddle is a combination of a long call and a long put on the same stock. You bought the call and the put at the same premium of $3. The two options have the same expiration date and the same exercise price of $50. If the stock price is $51, what is your net income?

Reference no: EM132235016

Questions Cloud

Require exporters to obtain special permission : Most countries create a list of “hostile” countries that require exporters to obtain special permission before the export is allowed to proceed.
How many years will it take for 490 to grow : How many years will it take for 490 to grow to ?1,083.43 if? it's invested at 8 percent compounded? annually?
What amount of cash will be received during december : The sales for October, November and December are $20,000, $24,000 and $36,000 , respectively. For any particular month of sales, the following percentages
What is cost of avoiding difficult or stressful conversation : What is the cost of avoiding a difficult or stressful conversation? At the workplace, avoiding such conversations can lead to absenteeism, low morale,
Expiration date and the same exercise price : The two options have the same expiration date and the same exercise price of $50. If the stock price is $51, what is your net income?
What is the balance in your margin account : What is the balance in your margin account at the end of Wednesday?
Organization-advancing personal and organizational agendas : organizational decisions as as first step in engaging with them in both responding to the organization and advancing personal and organizational agendas?
Discuss what should you do in the given situation : Introduction In this assignment, you will select one of the scenarios provided, discuss What Should You Do, and respond to the comments shared by your classmate
Short the call at the premium : The call option has an exercise price of $60. If the stock price increases to $57, what is your net income?

Reviews

Write a Review

Finance Basics Questions & Answers

  How are the target-firm shareholders harmed by such actions

How do the target-firm shareholders benefit from the defensive tactics of their management team? How are the target-firm shareholders harmed by such actions? Explain.

  The forecast for the stock price a year from now is 3750 if

constant growth reco corp. is expected to pay a dividend of 2.25 next year. the forecast for the stock price a year

  How the composition of the principal and interest components

Explain how the composition of the principal and interest components of a fixed-rate mortgage change over the life of the mortgage. What are the implications of this change?

  Estimating the rate of return on investment

Assume that you wish to purchase a 12-year bond that has a maturity value of $1,000 and a coupon interest rate of 11%, paid semiannually. If you require a 7.6% rate of return on this investment (YTM), what is the maximum price that you should be w..

  What is the discounted cash flow of the company

What is the Discounted Cash Flow of the company with the following Cash Flows:

  Problem regarding the initial capital investment

Mutant & co. is currently considering investment in new project, which requires initial capital investment of $ 50, 00,000. Life period of this project is 5 years. Mutant & co. is expecting following cash inflow from the project.

  Determine what type of lease this would be for the lessee

Determine what type of lease this would be for the lessee and calculate the initial obligation. Prepare Allen, Inc.'s amortization schedule for the lease terms. Prepare all the journal entries for Allen, Inc. for 2012. Assume a calendar year fiscal y..

  Shorter cash conversion cycle

All things being equal, would a firm prefer a longer or shorter cash conversion cycle? What are some examples or ways a firm could attain this?

  What amount is closest to the maximum you can pay for house

FNCE10002 Principles of Finance Assignment Questions, The University of Melbourne, Australia. What amount is closest to the maximum you can pay for a house

  Complete the balance sheet section of the plan

Read Case Application: Comprehensive Financial Plan. Complete the balance sheet section of the plan. Construct the balance sheet

  Computing the amount of money

You are interested in saving money for your first house. Your plan is to make regular deposits into brokerage account which will earn 14%. Your first deposit of $5,000 will be made today.

  Calculating the future or present value

When working with a series of annual cash flows and calculating the future or present value, we have to forward or discount the annual cash flows

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