Imagine that you are holding 6400 shares of stock currently

Reference no: EM13619443

Imagine that you are holding 6,400 shares of stock, currently selling at $40 per share. You are ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. If you continue to hold the shares until January, however, you face the risk that the stock will drop in value before year-end. You decide to use a collar to limit downside risk without laying out a good deal of additional funds. January call options with a strike price of $45 are selling at $6, and January puts with a strike price of $35 are selling at $8. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at $29, $40, $49? What will the value of your portfolio be if you simply continued to hold the shares?

Reference no: EM13619443

Questions Cloud

The contract is traded on a 100000 underlying par value : you purchase a treasury-bond futures contract with an initial margin requirement of 15 and a futures price of 115850.

A 1000-turn coil of wire that is 23cm in diameter is in a : a 1000-turn coil of wire that is 2.3cm in diameter is in a magnetic field that drops from 0.13t to 0t in 12ms. the axis

What is the terminal speed at which the bar falls assume : a 40g horizontal metal bar 12cm long is free to slide up and down between two tall vertical metal rods that are 12cm

Briefly explain why porosity decreases the thermal : briefly explain why porosity decreases the thermal conductivity of ceramic and polymeric materials rendering them more

Imagine that you are holding 6400 shares of stock currently : imagine that you are holding 6400 shares of stock currently selling at 40 per share. you are ready to sell the shares

Assume a project has earnings before depreciation and taxes : assume a project has earnings before depreciation and taxes of 120000 depreciation of 40000 and that the firm has a 30

If you hold a laser pointer 11m directly above the edge of : its nighttime and youve dropped your goggles into a swimming pool that is 4.0m deep. if you hold a laser pointer 1.1m

The issue on us being too much dependent on foreign imports : 1 the issue on us being too much dependent on foreign imports and us manufacturing jobs moving overseas is being

Draw a p v diagram adn then determine intial volume of the : a piston cylinder arrangement contains 1.0 kg of nitrogen gas initially at 100 kpa and 27c. the gas will be compressed

User Account

All Pages