### Describe ?carefully what happens if the investor exercises

Assignment Help Financial Management
##### Reference no: EM13215830

To value a three month American put option on wheat ?futures. The current futures price is 380 cents, the strike price is 370 cents, the?risk-free rate is 5% per annum, and the volatility is 25% per annum. Explain ?carefully what happens if the investor exercises the option after two months.?Suppose that the futures price at the time of exercise is 362 and the most recent ?settlement price is 360.

#### Questions Cloud

 What is the final rotational speed of the ball : a ball rolls down a 100m.the hill is inclined at 60 degrees. if the ball has a rotational inertia of 10kg-m^2 and starts from rest, what is the final rotational speed of the ball?(you must use the conservation of energy) Create interaction plots : Create interaction plots and What design is this, which factors are fixed and whic random - A datset is provided on a 3 factor factorial on the amount of rot on a potatoe crop. Calculate the new total resistance and the new current : Each time you remove a bulb you will calculate the new total resistance and the new current. Calculate the break-even units for each product : More-power company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for the next year.The projected income statement is as follows: Regular sanders mini-sanders Total Sales 3,000,000 1,800,000 4,800,000 Less:variable 1,800,000 .. Describe ?carefully what happens if the investor exercises : Explain ?carefully what happens if the investor exercises the option after two months. ?Suppose that the futures price at the time of exercise is 362 and the most recent ?settlement price is 360. Explain how to analyze financial transactions : Accounting is often referred as the language of business so to be successful in your career you must understand how the accounting information system works. You must be able to analyze financial transactions, understand how they will impact the or.. What is the final y-momentum of the system : The blue ball moves at an angle of -35° and a velocity of 2.1 meters/second. What is the final y-momentum of the system? Describe the variables and scale of measurement : Identify at least 2 variables for which you would utilize a repeated-measures ANOVA in your analysis and describe the variables and scale of measurement. Identify whether each factor is fixed or repeating. What is the mass of the gasoline : A cylindrical container of inside diameter 0.6 m is filled with gasoline to a depth of 2 m. What is the mass of the gasoline?

### Write a Review

#### Explain what are the three distribution methods available

What are the three distribution methods available to Annette? Which method should she choose to maximize tax deferral? Based on the appropriate life table, how much would her first required distribution be? When would this distribution happen?

#### Variable costing income statement and absorption statement

For month ended 6/30/X1, there were 1,531 of direct labor hours incurred - Explain how would I begin creating a variable costing income statement and absorption statement?

#### Explain the book value and market value of the firm

What are the book value and market value of the firm, and 2) if there are 2 million shares of stock in the new corporation what would be the price per share and the book value per share.

#### Herrings stock price after the planned dividend payout

Suppose the company cancels the dividend and announces that it will use the money saved to repurchase shares. What happens to the stock price on the announcement date?

#### Explain what is the total opportunity cost for a month

The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month. What is the total opportunity cost for a month based on the firm's current practice?

#### Writing a business plan to create financials

Writing a business plan to create financials as part of the business plan.  Section #1: Start-up expenses and capitalization.  Section#2: Financial Plan.

#### What is the coupon rate of these bonds

The current price of a \$1,000 par bond is \$1,101.72 and coupons are paid semi-annually in the amount of \$38.50. What is the coupon rate of these bonds?

#### Should investors care about a multinational firm

Should investors care about a multinational firm's accounting exposure - Accounting exposure is any exposure of a multinational firm's consolidated financial statements to exchange rate movements.

#### Hardware and software manufacturing to china or india

The firm manufactures a global positioning system (GPS) that sells for \$2,000, with cost of goods sold (hardware 30% and software 70%) of 55% of sales.

#### Pricing a first to default derivative

Examine the sensitivity of your answers as you vary the number of simulations from 1000, 10,000, 100,000 and 250,000, Pricing a Second to Default Derivative - Pricing a Second to Default Derivative

#### What is the dollar-weighted duration of the bank''s liability

What is the dollar-weighted duration of the bank's liability portfolio if the bank wants to maintain zero leverage - adjusted duration gap?

#### Calculate the expected return of stock a

Calculate the expected Return of Stock A, expected Return of Stock B, standard Deviation of Stock A and standard Deviation of Stock B