What is your total net profit on investment

Assignment Help Financial Management
Reference no: EM131886305

1. You purchased eight General Motors (GM) call-option contracts with a strike price of $28.00 at a cost of $1.75 per option. The option expires today when the value of GM stock is $32.04. Ignoring transaction costs and noting that one contract is for 100 options, what is your total net profit (or loss) on your investment?

2. You wrote five call-option contracts (noting that a contract is for 100 options) on CNO Financial (CNO) stock with a strike price of $17.00 at a price of $3.05 per option. Ignoring transactions costs, what is your total net profit or loss on this investment if the price of CNO is $15.75 on the option expira- tion date? [Hint: An option’s “writer” is the counterparty to the option’s buyer.]

Reference no: EM131886305

Questions Cloud

What is the cost of common stock : What is the before-tax cost of debt and what is the after-tax cost of debt? What is the cost of common stock?
What is the yearly-return standard deviation for portfolio : The correlation coefficient between Sodastream’s returns and Pegasus’s returns is 0.7. What is the yearly-return standard deviation for this portfolio?
Compute the total percentage return on your investment : Compute the total percentage return on your investment.
The interest rates in the term structures for maturities : Calculate the interest rates in the term structures for maturities of one to five years for following series of one year rates.
What is your total net profit on investment : You purchased eight General Motors call-option contracts with strike price of $28.00 at cost of $1.75 per option. what is your total net profit on investment?
Additional funds-expansion of their new production facility : The Green Company needs additional funds to help in the expansion of their new production facility.
Financing of today medical–industrial complex : Compare the structure and financing of today's “medical–industrial complex” to your mental image of the nineteenth- and early twentieth-century hospital.
What is its operating expense ratio : What is its operating expense ratio? what is the property’s break even ratio?
What total price is paid for the property : An investment property has an annual net operating income of $85,000. What total price is paid for the property?

Reviews

Write a Review

Financial Management Questions & Answers

  Certificate of deposit at interest compounded quarterly

Bank one offered a 14-year certificate of deposit (CD) at 4.47% interest compounded quarterly. On the same day on the Internet, First Bank offered a 14-year CD at 4.46% compounded monthly. Find the APY for each CD. Which bank paid a higher APY?

  Net profit margin-what is the firms return on equity

ABC earned a net profit margin of 5.8% last year and had an equity multiplier of 3.8. If its total assets are $102 million and its sales are 183 million, what is the firm's return on equity?

  What is present value of settlement assuming interest rate

Daniel recently got a settlement in a lawsuit that promises $210 in 9 years. It will also pay him a 2nd amount of $490 that will be received in 14 years. Daniel, wants instead to spend the settlement money today. What is the present value of his sett..

  Current market values of dietrich equity and debt

What are the current market values of Dietrich's equity and debt? What are the current market values of Steinberg's equity and debt?

  The firms assets and liabilities at given point in time

The firm's assets and liabilities at a given point in time are reported on the firm's:

  Two investments in her portfolio

If these are the only two investments in her portfolio, what is her portfolio's beta?

  Discuss the major contents of the fund financial statements

Discuss the major contents of the fund financial statements and government wide financial statements.

  What is the future value of an ordinary annuity

What is the future value of an ordinary annuity of $1,000 per year for 7 years compounded at 10%? What would be the future value if it were an annuity due? What is the present value of a $1,000 perpetuity discounted back to the present at 8 percent?

  Approved credit-amount financed and finance charge

Using the following information on the tables in Business Math Handbook that accompanies the course textbook to answer the question. $140.10 per month cash price: $5,000 Down payment: $0 cash or trade months with bank-approved credit; amount financed..

  What is the payback period for this project

Flowers Unlimited is considering purchasing an additional delivery truck that will have a seven-year useful life. What is the payback period for this project?

  Financial planner offers you two different investment plans

Your financial planner offers you two different investment plans. Plan X is a $17,000 annual perpetuity. Plan Y is a 16-year, $27,000 annual annuity. Both plans will make their first payment one year from today. At what discount rate would you be ind..

  What is the banks cost of preferred stock

Sixteenth Bank has an issue of 6% preferred stock with a $100.00 par value that just sold for $89 per share. What is the bank’s cost of preferred stock? (Show your work and round your answer to two decimal places).

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