What is your net profit from this position

Assignment Help Financial Management
Reference no: EM131328217

A call option on a stock, with time to maturity of 2 months and strike price of $25.67, is currently trading at a premium of $1.78 per share. If you buy options on 20,000 shares (200 contracts), and then at maturity the stock is trading at $22.76, what is your net profit from this position?

Reference no: EM131328217

Questions Cloud

Explain the capital structure of ford motors company : Explain the capital structure of Ford Motors Company. Do they rely more heavily on debt or equity? What are their structure weights (%'s)?
What is the after-tax distribution yield : A fund has $848 million dollars of assets, $29 million of liabilities, and 10 million shares outstanding. During the year the fund made qualified dividend distributions of $2.8 per share, long term capital gains distributions of $1.2, and short-term ..
Explain the way an organization with which you are familier : Explain the way(s) an organization with which you are familiar measures quality and customer satisfaction. What can be done to improve CRM?Lastly, explain how you can personally have a positive impact on customer loyalty in your position.
Find the disruptive and visual corona voltage : find the disruptive and visual corona voltage of a grid line operating at 132kv ,conductor diameter =1.9cm,conductor spacing =3.81m,temp=44,pressure=73.7,conductor surface factor ;fine weather=0.8;rough weather=0.66
What is your net profit from this position : A call option on a stock, with time to maturity of 2 months and strike price of $25.67, is currently trading at a premium of $1.78 per share. If you buy options on 20,000 shares (200 contracts), and then at maturity the stock is trading at $22.76, wh..
The fund would fail to beat benchmark in one of five year : In a perfectly efficient market, an active strategy mutual fund that charges a 1% fee has about a 47% chance of beating the index net of fee. In a universe of 5,000 funds, how many funds would you expect to beat the index all but once out of the past..
Describe a decision-making process for employees : Imagine your manager has requested that everyone in the company take the StrengthsFinder test. Now, your manager has asked you to put together a training tool on how to best coach and develop employees in the decision making process who have varie..
Describe total cost of ownership and include descriptions : Describe total cost of ownership and include descriptions of implementation project and ongoing maintenance costs. Explain the benefits of the project, which include tangible and intangible benefits.
What is the after-tax salvage value of the machine : Boston Corp. purchased a new machine 3 years ago for $80000, and has depreciated it under MACRS with a 3-year recovery period. Assume a 40% tax rate. What is the after-tax salvage value of the machine if it can be sold today for $31000?

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the front-end load

The World Income Appreciation Fund has current assets with a market value of $11.2 billion, 420 million shares outstanding, and a current market price quotation of $28.08. Calculate the front-end load.

  About the retail leases

In retail leases, the following is true. The rent quoted for office space is often not reflective of the rent actually being paid for the usable space. One of the factors that must be known in order to calculate the effective rent is

  Bond with coupon rate

A $1000 bond with a coupon rate of 6.2% paid semi annually has five year to maturity and a yield to maturity of 7.5%. If interest rates rise and yield to maturity increases to 7.8%, what will happen to the price of the bond? A. fall by $11.83 B. rise..

  Identify the federal income tax issues that pete faces

Orange Inc, a calendar year corporation in Clemson, South Carolina, elects S corporation status for 2014. The company generated a $74,000 NOL in 2013 and another NOL of $43,000 in 2014. Orange recorded no other transactions for the year.

  What is the present value of the cash flows

The state lottery's million-dollar payout provides for $1.3 million to be paid in 20 installments of $65,000 per payment. The first $65,000 payment is made immediately, and the 19 remaining $65,000 payments occur at the end of each of the next 19 yea..

  What is your current mortgage balance outstanding

Suppose you currently have a mortgage with 10 years remaining with annual payments (the next one coming in exactly one year) at a rate of 6%. The original mortgage amount was a 20-year mortgage for $1 million. What is your current mortgage balance ou..

  Identify type of financial market where-flow of funds occurs

Worcester Tool Company is a large, U.S.-based, multinational corporation with subsidiaries in eight different countries. Explain the various ways in which Citigroup could facilitate Worcester’s flow of funds, and identify the type of financial market..

  Hedge through covered interest arbitrage

You are expecting to receive 10M Euros 3-months from now. The interest rates are 3% in the US and 5% in Germany. Current spot exchange rate: $1.20/Euro and 3-month Forward rates: $1.15/Euro. How much $ will you have 3-months from now if you hedge thr..

  Inventory Systems

Mitsi Inventory Systems, Inc., has announced a rights offer. The company has announced that it will take five rights to buy a new share in the offering at a subscription price of $25. What price should the stock sell for ex-rights? What is the amount..

  What is the future value of these cash flows in year

Havana, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $ 970 2 1,200 3 1,420 4 2,160 Requirement 1: If the discount rate is 7 percent, what is the future value of these cash flows in Year 4?

  Explain risk vs. reward related to personal financial goals

Explain risk vs. reward related to your personal financial goals. Explain how savings and investing are impacted by the time value of money. Describe how interest rates impact time value of money calculation (use time value of money concepts and calc..

  Discounted cash flow techniques

Discounted cash flow techniques are capital budgeting techniques that take into account both the time value of money and the estimated net cash flow from an investment. How is the NPV calculated and what is the decision rule?

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