What is the percentage return on your investment

Assignment Help Business Economics
Reference no: EM13800526

1. You bought a call option with a strike price of $35. What is your total payoff on this option contract if the underlying stock is selling for $36.70 on the option expiration date?

2. You purchased a call option with a $22.50 strike price and a call premium of $0.40. On the expiration date, the underlying stock was priced at $23.40 per share. What is the percentage return on your investment?

3. Jasmine purchased one call option with a strike price of $35 when the call premium was $1.10. What is the break-even stock price?

4. A 4-month call has a strike price of $20. The current underlying stock price is $21.45. What is the intrinsic value of this call?

5. A stock is valued at $25.75 a share. A European 6-month call option has a strike price of $25 and an option premium of $1.50. The market rate is 9.5 percent and the risk-free rate is 2.5 percent. What is the price of a European 6-month put option with a $25 strike price?

Reference no: EM13800526

Questions Cloud

Economists to control for various factors : Which of the following are not assumed by economists to control for various factors that are not relevant or important to understand and analyze using a model a specific real life situation that economists are concerned with in a given situation?
Perfectly competitive market at profit-maximizing quantity : Suppose that, in a perfectly competitive market at the profit-maximizing quantity, the market price is greater than average total cost. Carefully explain what will happen to the number of firms, the market supply, and the price of the good as we move..
What is the monopolists profit-maximizing level of output : Suppose a monopolist faces the following demand curve: What is the monopolist’s profit-maximizing level of output? What price will the profit-maximizing monopolist charge? How much profit will the monopolist make if she maximizes her profit?
Communication technologies and marketing research : Which two of the changes/trends listed do you think will have a large impact on the companies? Communication Technologies, Marketing Research, Demographic Patterns, Business & Organizational customers.
What is the percentage return on your investment : You bought a call option with a strike price of $35. What is your total payoff on this option contract if the underlying stock is selling for $36.70 on the option expiration date? You purchased a call option with a $22.50 strike price and a call prem..
Cost of child-care is equivalent : Frank is a single-father with one child. The cost of child-care is equivalent to $150 per day. When Frank works, he receives an hourly wage of $20. In addition he has $150 of non-labor income per day. He sleeps 8 hours a day. Given these constraints,..
Organized into mainly profit-center divisions : A large electronics company is organized into mainly profit-center divisions. The components division and the consumer electronics division are profit-center divisions of the company. The consumer electronics division assembles components into device..
Incentive plan align the employees incentives with the firms : Part of a worker’s pay on an automobile assembly line is based on the number of cars in a pay period that come off the worker’s line and pass inspection. The remaining portion of the worker’s pay is an hourly wage that is fixed and only depends on th..
Applying the concept of diminishing marginal utility : The government wants to make medicare benefits available to more people, but to achieve this goal, it needs to make cuts in the existing medicare budget. The two areas where they are considering cuts are non-essential elective surgery and 6-12 month ..

Reviews

Write a Review

 

Business Economics Questions & Answers

  Elucidate the equilibrium price and equilibrium quantity

Elucidate the equilibrium price and equilibrium quantity. Suppose the price is currently $2. What problem exists in the economy? What would you expect to happen to price.

  Expect to see non-constant variance in the data

Discuss the types of situations where you would expect to see non-constant variance in the data. Provide examples to support your response. Describe a specific instance where heteroscedasticity would be a problem and the remedial measures that could ..

  Elucidate how a recessionary output gap would emerge

Elucidate how a recessionary output gap would emerge in an economy where long-run aggregate supply curve is persistently shifting to right.

  Explain rational expectations

Explain rational expectations in your own words. Using the rational expectations model is the U.S. stock market efficient? Why or Why not?

  Illustrate what do laws of supply and demand predict

Illustrate what do laws of supply and demand predict would be result of an immediate removal of minimum wage in terms of price of labour and quantity available.

  Elasticity of demand for a representative firm

Suppose you read in an industry publication that the Rothschild index for the petroleum industry is 0.88. Based on past experience, you know that the price elasticity of demand for the petroleum products sold by your firm is ?1.5.

  Analyze the accounting equation as a concept that underpins

Analyze the accounting equation as a concept that underpins the work of professional accountants and how an understanding of the equation can impact business decision making.

  Q1 liliana sells dvds it costs her 40 an hour to keep the

q1. liliana sells dvds. it costs her 40 an hour to keep the store opem 500 for monthly rent and 3 an hour for

  Estimated the price elasticity for cigarettes

It has been estimated that the price elasticity for cigarettes is 0.164. Assuming there are currently no taxes on cigarettes, to reduce cigarette purchases 5%, government would need to tax cigarettes enough t.:

  Demand for saras sweatshirts in long run

What happens to the demand for Sara's sweatshirts in long run. In long run, what happens to Sara's economic profit.

  Q1 total industry sales are 105million the top four firms

q1. total industry sales are 105million. the top four firms account for sales of 10 million 9million 8 million and 5

  Illustrate what is the effect on equilibrium real gdp

Suppose that Congress enacts a lump-sum tax cut of $750 billion. The marginal propensity to consume is equal to 0.75. Assuming that Ricardian equivalence holds true, illustrate what is the effect on equilibrium real GDP.

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