What are the break-even stock prices at expiration

Assignment Help Financial Management

Reference no: EM131087991

Generous Dynamics stock currently sells for 73.0 dollars per share. Consider the following portfolio of options on Generous Dynamics stock: -- short one call option with strike price 72.0 and price 7.2615 -- short two put options with a strike price 72.0 and price 5.0125 What are the break-even stock prices at expiration? (At what prices is the profit zero?) 59.726 and 91.536 54.713 and 89.287 63.357 and 89.287 47.452 and 96.548 52.464 and 91.536

Reference no: EM131087991

Questions Cloud

What is the one-year standard deviation : High Mountain Homes has an expected annual return of 16.1 percent and a standard deviation of 20.3 percent. What is the smallest expected loss over the next month given a probability of 2.5 percent? A portfolio has a 3-year standard deviation of 18.1..

Suppose the yield on two-year treasury bond : Suppose the yield on a two-year Treasury bond is 5 percent and the yield on a one-year Treasury bond is 4 percent. If the maturity risk premium (MRP) on these bonds is zero (0), what is the expected one-year interest rate during the second year (year..

How does the level of effort compare with the optimal level : A restaurant owner has hired a manager to run the daily operations of her restaurant. Restaurant profits depend on both the manager’s unobservable effort level and random fluctuations in demand. How does the level of effort compare with the optimal l..

Calculate the crossover rate : Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,400 per year for 5 years. Calculate the two projects’ NPVs and IRRs a..

What are the break-even stock prices at expiration : Generous Dynamics stock currently sells for 73.0 dollars per share. Consider the following portfolio of options on Generous Dynamics stock: -- short one call option with strike price 72.0 and price 7.2615 -- short two put options with a strike price ..

What is the delta of call option with strike price : IBM stock currently sells for 84 dollars per share. The implied volatility equals 47.5 percent. The risk-free rate of interest is 4.5 percent continuously compounded. What is the delta of a call option with strike price 83 and maturity of 8 months?

Pairs of portfolios have the same payoff : Which of the following pairs of portfolios have the same payoff?

Make semiannual payments-what is the current bond price : Grohl Co. issued 9-year bonds a year ago at a coupon rate of 9 percent. The bonds make semiannual payments. If the YTM on these bonds is 8 percent, what is the current bond price?

Made the first payment : You borrowed $8,000 at a rate of 7.5% and must repay it in 5 equal payments at the end of each of the next 5 years. How much would you still owe at the end of the first year, after you have made the first payment?

User Account

All Pages