What is the payoff per share on the investor bear spread

Assignment Help Finance Basics
Reference no: EM132826087

Suppose an investor buys a bear spread on CBS stock, where the put options used to construct the bear spread have strike prices equal to $62 per share and $54 per share. Both options are European exercise.

If the stock price on the expiration date is $56.45 per share, what is the payoff per share on the investor's bear spread?

Reference no: EM132826087

Questions Cloud

Describe the two basic types of transaction exemptions : Describe the two basic types of "transaction" exemptions that may be available to VirtualStream that would allow the firm not to have to register
What is the market value of the collateral : A hedge fund wants to borrow $2,500,000 using a 3 month repurchase agreement. The repo dealer is quoting a buyback price of $2,533,414.86 and a haircut of 2.49%
What is the total payoff on the speculator options portfolio : If IBM's stock price on date T is equal to $118.22 per share, what is the total payoff on the speculator's options portfolio?
What is the time value of the put option : A put option is priced at $12.8 per share and the put's strike price is equal to $79 per share. The price of the underlying stock is equal to $70.12 per share.
What is the payoff per share on the investor bear spread : If the stock price on the expiration date is $56.45 per share, what is the payoff per share on the investor's bear spread?
Describe the plan of evaluation you would have recommended : Describe the plan of evaluation you would have recommended for the Affordable Care Act. What data would have been important to have included in that evaluation.
Explain the internal characteristics that influence the rate : Briefly explain the internal characteristics that influence the rate of return for a company.
What did the act remind of from conversation : Explain What did the act remind you of from our conversation? How did seeing this rhetorical act help you understand the content and/or context more?
What is the price per share of otherwise similar call option : To rule out arbitrage, what is the price per share of an otherwise similar call option?

Reviews

Write a Review

Finance Basics Questions & Answers

  Find the compound amount and the compound interest

Find the compound amount and the compound interest if $10,000 is invested for 5 years at 12% interest compounded monthly.

  Merton enterprises has bonds on the market making annual

merton enterprises has bonds on the market making annual payments with 14 years to maturity and selling for 972. at

  Synthesizing information describe the limitations of gdp

Drawing Conclusions What would be the effects of a decline in GDP?

  What is the effective annual yield

Bourdon Software has 5.2 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 104 percent of par. What is the effective annual yield?

  What is the annual depreciation on the machine

Three years ago, your firm purchased a Machine for Rs.52, 000. It is being depreciated straight line to a salvage value of Rs. 2,000 in two more years.

  Explain what was bavarian brewhouses dividend payout

Explain what was bavarian brewhouse's dividend payout ratio in 2004 - the required rate of return on extruded's shares is 13%. what is the share price today based on the Gordon growth model?

  Future value of the amount

what would be the future value of the amount you will pay for the service contract?

  Foundation for future discussions

Respond to the following scenario with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.

  What is the pretax cost of debt

Calculating Cost of Equity The Dybvig Corporation's common stock has a beta of 1.21. If the risk- free rate is 3.5 percent and the expected return on the market

  Interest-on-interest

Consider a $1,300 deposit earning 7 percent interest per year for 10 years. How much total interest is earned on the original deposit

  List the seven steps in planned buying

List the seven "Steps in Planned Buying" discussed in Module 6 in the proper order. Next, provide an example of how each step would be applied

  What rate of return would they be? earning

They? don't have the slightest idea what return they would be making on their investment of ?$17,912.58. What rate of return would they be? earning?

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