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You have a short position in a put option on Apple Inc. common stock. The option has an exercise price of $136 and the stock is currently trading at $127. The option premium is $3.90 per contract.
a. What is your net profit/loss if Apple Inc. stock price increased to $180 and stays at that price until the option expires? (Show your calculations)
b. What is your net profit/loss on the option if Apple’s stock price decrease to $109 and the option holder exercises the option? (Show your calculations)
c. Below, graphically show your answers to parts (b) and (c) in the profit and loss diagram. In the graph be sure to add the exercise price (X), the payoff structure from the option, the profit/loss amount on the y-axis for parts (b) and (c).
A 10 year, 12% semiannual coupon bond with a par value of $1,000 may be called in 4 years at a call price of $1,060. The bond sells for $1,100. (Assume that the bond has just been issued), 1. What is the bonds yield to maturity? 2. What is the bonds ..
You own a put option on Ford Stock with a strike price of $10. The opti?on will expire in exactly six months time. If the stock is trading at $8 in 6 months, what will be the payoff of the put? If the stock is trading at $23 in 6 months, what will be..
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Explain how ethical, social, and political issues are connected and give some examples; list and describe the key technological trends that heighten ethical concerns; and differentiate between responsibility, account-ability, and liability.
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