Drop of bank of america stock

Assignment Help Finance Basics
Reference no: EM132200314

An investor would like to bet on the further drop of Bank of America stock. The investor bought five Bank of America put contracts, with an exercise price of $6 expiring in 3 months. The premium is $1 each. What is the dollar profit or loss if the stock price at expiration is $7, assuming that there are no transaction costs?

Reference no: EM132200314

Questions Cloud

Determining the interest to finance education : Most of the students want to pay off these loans in 15 years but want to make sure their yearly payments account for no more than 7% of their gross annual
What do you observe about the two results : Write a Haskell function that generates all binary trees with empty leaves of size n. What do you observe about the two results?
What is the net present value and irr of the project : The cost of capital for this type of equipment is 21%. What is the net present value and IRR of the project?
Write an inventory program for a used car lot : Write an inventory program for a used car lot. You should have one Car parent class and child classes for 3 vehicle types.
Drop of bank of america stock : An investor would like to bet on the further drop of Bank of America stock. The investor bought five Bank of America put contracts
Increase in the velocity of money : Supposed there is an increase in the velocity of money caused by the increased use of ATM machines. How would prices and output be affected in the short run?
Write a grammar that recognize a list of variable definition : Write a grammar (not necessarily LL(1)) that recognizes a list of variable definition lines.
Calculate the share price for beagle beauties : The required return is 14.20 percent. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual income model
Strategies to retain and increase cash : What is the different management strategies to retain and increase cash?

Reviews

Write a Review

Finance Basics Questions & Answers

  Important findings about a manager routine

Identify the three findings and describe ways that technology and social media have changed the roles of managers since Mintzberg's 1960 study.

  Compute the internal rate of return

A capital project has an ititial investment of 225,000 and cash flows in years 1-6 of 80,000, 65,000, 50,000, 50,000, 35,000, and 60,000, respectively.

  Difference between forward start option and chooser option

Explain the difference between a forward start option and a chooser option. -  Describe the payoff from a portfolio consisting of a floating lookback call and a floating lookback put with the same maturity.

  Customer survey for each market region

Customer Survey for each market region as a cross-tabulation (use pivot tables as appropriate), along with frequency distribution, histograms, and quatiles of these data.

  Using the appropriate interest table answer each of the

using the appropriate interest table answer each of the following questions. each case is independent of the others.a

  Find the company weighted average cost of capital

The company's long-term growth rate of dividends is expected to be 8%. Assuming a 40% tax rate, find the company's weighted average cost of capital (WACC).

  If the opportunity cost of capital is 11 calculate npv for

the following are the cash flows of two projectsyear project a project bnbsp0 minus290 minus2901 170 1902 170 1903 170

  What if the annual traffic rate increases at 8prcnt annually

Jeff has estimated that traffic will increase annually at 5%. How long will the current bridge system work before a new bracing system is required? What if the annual traffic rate increases at 8% annually? At what traffic increase rate will the curre..

  At an interest rate of 12 the six-year discount factor is

at an interest rate of 12 the six-year discount factor is .507. how many dollars is .507 worth in six years if

  Path dependent options and path independent options

Explain the advantages and disadvantages of implementing portfolio insurance using stock and puts in comparison to using fiduciary call.

  What appears to be the targeted debt ratio of a firm

What appears to be the targeted debt ratio of a firm that issues $15 million in bonds and $35 million in equity to finance its new capital projects.

  What is the degree of operating leverage

If sales increase 25%, EBIT increases 50%, debt increases 75%, and working capital increases 12.5%, what is the degree of operating leverage?

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