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Determine the breakeven stock price at expiration

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Reference no: EM133120506

1. Explain each of the following concepts as they relate to call options.

a. Delta

b. Gamma

c. Rho

2. What are the differences among scalpers, day traders, and position traders?

3. Assume the possible stock prices of Hull Inc. are $150, $155, $160, $165, $170, $175, and $180. The price(premium) is $5 for October 165 put option of Hull Inc.

Suppose you buy one October 165 put option contract (Np=100)of Hull Inc. and hold it until the options expire.

a) Determine the profit and loss at respective stock prices of Hull Inc.

b) Determine the breakeven stock price at expiration.

c) What are the maximum possible profit and loss on this transaction.

4. Over the last few decades, the size of the foreign exchange market has increased significantly. Explain in detail the factors that has fueled this growth. Why is the US dollar the most widely used currency of quotation in the foreign exchange markets?

5. "Explain the principle and features of comparative advantage. How does it relate to international trade?". Discuss.

Reference no: EM133120506

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