Six month call options with strike price and cost

Assignment Help Financial Management

Reference no: EM13952317

Six month call options with strike price of $45 and $50 cost $7 and $4, respectively.

1. What is the maximum gain when a bull spread is created from the calls?

2. What is maximum loss when a bull spread is created from the calls?

3. What is the maximum gain when a bear spread is created from the calls?

4. What is the maximum loss when a bear spread is created from the calls?

Reference no: EM13952317

Questions Cloud

Manufacturing facility include environmental compliance : Your responsibilities at a small manufacturing facility include Environmental Compliance; a new employee asks you why the emissions data that EPA actually tracks are not exactly the same as the six major criteria air pollutants? How do you explain..

Rank the desirability of swings : The manager is then asked to rank the desirability of swings from the worst to the best positions on each non-monetary attribute. The resulting ranks are set out below (1=most desirable swing).

Cash flows as those from the rule in the contract : Your US-based firm is about to sign a contract to buy a machine from a manufacturer based in Singapore. The price of the machine is S$ 3,000,000 and the payment is to be made in US$ after one year (at t = 1) according to the following rule. Show the ..

In-depth understanding of social mobility : This article provides an in-depth understanding of social mobility. His article concentrates on the process of educational attainment, the transition from school to work, and the intragenerational mobility that occurs over the working life.

Six month call options with strike price and cost : Six month call options with strike price of $45 and $50 cost $7 and $4, respectively. What is the maximum gain when a bull spread is created from the calls? What is maximum loss when a bull spread is created from the calls? What is the maximum gain w..

A call option on an asset has a delta : A call option on an asset has a delta of 0.6. A trader has sold 1,000 options and wants to create a delta-neutral position. Should the trader take a long or short position in the asset? How many units of the asset should be bought or sold?

Two more south florida nuclear reactors article : Instructions: Florida Power and Light (FPL) are seeking to add two more nuclear power plants on the current Homestead location where two nuclear power plants already exist.

How many put option contracts should be purchased : A portfolio manager in charge of a portfolio worth $8 million is concerned that the market might decline rapidly during the next six months and would like to use options on the S&P 100 to provide protection against the portfolio falling below $7 mill..

How much of the portfolio value in percentage : You need to create a portfolio with duration of 8 years. You can use a 5 year zero-coupon bond and a perpetuity which pays $100 each and every year forever and has yield of 10%. How much of the portfolio value in percentage you would have to invest i..

User Account

All Pages