Calculate the net payouts for covered call strategy

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Reference no: EM131888407

1. A bond pays annual interest. Its coupon rate is 7.2%. Its value at maturity is $1,000. It matures in 4 years. Its yield to maturity is currently 4.2%. The modified duration of this bond is ______ years.

2. A bond with a 8-year duration is worth $1,090, and its yield to maturity is 9.0%. If the yield to maturity falls to 8.74%, you would predict that the new value of the bond will be approximately

3. You have the following information: Put: X=$30, Premium=$5 Call: X=$40, Premium=$8 You bought the stock when it was $35 Scenarios: S=5, S=32, S=65 Given above information, please calculate the net payouts for a covered call strategy for each different scenario.

Reference no: EM131888407

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