How much does your option cost per bushel of corn

Assignment Help Financial Management
Reference no: EM131904347

Suppose you purchase the June 2014 call option on corn futures with a strike price of $4.90 at the last price of the day. Use Table 23.2

How much does your option cost per bushel of corn? (Do not round intermediate calculations. Round your answer to 5 decimal places, e.g., 32.16161.)

Option cost $  per bushel

What is the total cost of your position? Assume each contract is for 5,000 bushels. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Total cost $   

Suppose the price of corn is $4.84 per bushel at expiration of the option contract. What is your net profit or loss from this position? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer as a positive value.)

LossProfit $    

What is your net profit or loss if corn futures prices are $5.19 per bushel at expiration? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answeras a positive value.)

LossProfit $

Reference no: EM131904347

Questions Cloud

The annualized continuously compounded rate of return : Calculate the annualized continuously compounded rate of return for each future stock price in the range of $15 to $55 with a $2 interval
Why the midpoint is different from the expected stock price : Compare the midpoint of the intervals in a) and b) with the expected stock price and explain why the midpoint is different from the expected stock price.
Order to execute a synthetic-put-option insurance : Please help Charlene figure out how much she should sell her holdings in order to execute a synthetic-put-option insurance.
Three-step binomial tree to estimate the option value : Please use a three-step binomial tree to estimate the option value. Also estimate the option’s delta
How much does your option cost per bushel of corn : How much does your option cost per bushel of corn? What is your net profit or loss if corn futures prices are $5.19 per bushel at expiration?
Consdering two projects with following net cash flows : Your division is consdering two projects with following net cash flows (in millions):
The discounted payback period for expansion project : what is the discounted payback period for the expansion project? what is the Modified Internal Rate of Return ( MIRR ) for the expansion project?
Constant growth stock valuation model : what is the most you should pay for the stock according to the constant growth stock valuation model.
What was the purchase price of the furniture : What was the purchase price of the furniture?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the yield on seven-year treasury note

The real risk-free rate is 3.05%. Inflation is expected to be 2.6% this year, 3.85% next year, and then 3.2% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity. What is the yield on a 7-year T..

  Contractual adjustments are expected to of billed charges

Your hospital has billed charges of $4,000,000 in February. Contractual adjustments are expected to be 20% of billed charges.

  Volume variance with a column for Routine Services

Greenview Hospital operated at 120% of normal capacity in two of its departments during the year. It operated 120% times 20,000 normal capacity direct labor nursing hours in routine services and it operated 120% times 20,000 normal capacity equipment..

  It is when a principal is unsatisfied with an agent

Define the concept of agency problems and cite three examples of such problems. it is when a principal is unsatisfied with an agent

  What is its yield to maturity

Consider a 6-year 8-percent bond purchased at a price of $950.What is its yield to maturity? What is the realized yield if the coupon reinvestment rates are: 12% (today), 8% (in one year), 5% (in two years), 11% (in three years), 9% (in four years), ..

  Determine whether sodaco should build the plant

Sodaco is considering producing a new product: Chocovan soda. Sodaco estimates that the annual demand for Chocovan, D(in thousands of cases), has the following mass function: P(D 30) .30, P(D 50) .40, P(D 80) .30. Considering the reward for each acti..

  What is the effective annual rate of return

Suppose a preferred stock pays a quarterly dividend of $2 per share. The next dividend comes in exactly one-fourth of a year. If the price of the stock is $80, what is the effective annual rate of return that the stock offers investors?

  According to the dividend discount model

Sorvino Co. is expected to offer a dividend of $3.20/sh per year forever. The required rate of return on Sorvino stock is 10%. Thus, the price of a share of Sorvino stock, according to the dividend discount model is?

  Financial statement analysis project

Financial Statement Analysis Project -A Comparative Analysis of Oracle Corporation and Microsoft Corporation

  Calculate the equivalent annual cash flows the project

Allied Products, Inc., is considering a new product launch. The firm expects to have annual operating cash flow of $9.5 million for the next eight years. After the first year, the project can be dismantled and sold for $26.5 million. If the estimates..

  Sustainable growth rate is defined as maximum rate

The sustainable growth rate is defined as the maximum rate at which a firm can grow given which of the following conditions?

  Estimate of the company cost of equity

Stock in Country Road Industries has a beta of 0.68. The market risk premium is 8 percent, and T-bills are currently yielding 4.5 percent. The company's most recent dividend was $1.9 per share, and dividends are expected to grow at a 4 percent annual..

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