Using strike 195, and S1 $170, calculate the payoff and profit of a protective put.v
- Using strike 195, and S1 $170, calculate the payoff and profit of a protective put.v
Homework Answers
Put Strike = $ 195 and Underlying Asset Price = $ 170, Put Premium = $ 1
Protective Put implies holding a long position in the underlying asset while purchasing a put option.
Put Payoff = (Strike Price - Underlying Asset Price) - Put Premium = 195 - 170 - 1 = $ 24
Add Answer to:
Using strike 195, and S1 $170, calculate the payoff and profit
of a protective put.v
Using strike 225 and S1 $250 construct a long straddle and determine the profit and ROI.
Using strike 225 and S1 $250 construct a long straddle and determine the profit and ROI.
3. Construct profit and payoff diagrams for the following: a) Long a 105 strike straddle. b)...
3. Construct profit and payoff diagrams for the following: a) Long a 105 strike straddle. b) Short a 95 strike straddle. c) Combine a) and b) in a single portfolio.
A protective put consists of a long put strike at 4, premium of $3.5, and a...
A protective put consists of a long put strike at 4, premium of $3.5, and a long stock that was bought at $38. What is the profit of the protective put if the stock price is? a. $35? b. $42? An investor sells a European call on a share for $13. The strike price is $36. Under what circumstances does the investor make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of...
A trader creates a long butterfly spread from put options with strike prices of $160, $170,...
A trader creates a long butterfly spread from put options with strike prices of $160, $170, and $180 per share by trading a total of 20 option contracts (5 contracts at $160, 10 contracts at $170 and 5 contracts at $180). Each contract is written on 100 shares of stock. The options are worth $22, $28, and $36 per share of stock. What is the value (payoff) of the butterfly spread at maturity as a function of the then stock...
A trader creates a long butterfly spread from put options with strike prices of $160, $170,...
A trader creates a long butterfly spread from put options with strike prices of $160, $170, and $180 per share by trading a total of 20 option contracts (5 contracts at $160, 10 contracts at $170 and 5 contracts at $180). Each contract is written on 100 shares of stock. The options are worth $22, $28, and $36 per share of stock. What is the value (payoff) of the butterfly spread at maturity as a function of the then stock...
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: State of Nature Decision Alternative s1 10 4 S2 d1 d2 (a) Suppose P(S1)-0.2...
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: State of Nature Decision Alternative s1 10 4 S2 d1 d2 (a) Suppose P(S1)-0.2 ad P(s2)-0.8. What is the best decision using the expected value approach? Round your answer in one decimal place The best decision is decision alternative d2 , with an expected value of 3.2 (b) Perform sensitivity analysis on the payoffs for decision alternative d1. Assume the...
Using strike 225, and S1 $300, do a covered call. What do you conclude about maximum...
Using strike 225, and S1 $300, do a covered call. What do you conclude about maximum gain?
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: State of Nature Decision Alternative s1 S2 101 4 (a) Suppose P(si)-0.2 and...
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: State of Nature Decision Alternative s1 S2 101 4 (a) Suppose P(si)-0.2 and P(s2)-0.8. What is the best decision using the expected value approach? Round your answer in one decimal place. The best decision is decision alternative d2 v , with an expected value of 3.2 (b) Perform sensitivity analysis on the payoffs for decision alternative di. Assume the probabilities...
The following profit payoff table shows profit for a decision analysis problem with two decision alternatives...
The following profit payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature. Suppose that the decision maker obtained the probability assessments P(S1) = 0.65, P(S2) = 0.20, and P(S3) = 0.15. State of Nature Decision Alternative S1 S2 S3 d1 150 175 50 d2 175 75 100 Use the expected value approach to determine the optimal decision. The optimal decision is?
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: State of Nature Decision Alternative s1 s2 d1 10 1 d2 4 3 (a...
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: State of Nature Decision Alternative s1 s2 d1 10 1 d2 4 3 (a) Suppose P(s1)=0.2 and P(s2)=0.8. What is the best decision using the expected value approach? Round your answer in one decimal place. The best decision is decision alternative - Select your answer -d1d2Item 1 , with an expected value of . (b) Perform sensitivity analysis on the...
A protective put consists of a long put strike at 4, premium of $3.5, and a long stock that was bought at $38. What is the profit of the protective put if the stock price is? a. $35? b. $42? An investor sells a European call on a share for $13. The strike price is $36. Under what circumstances does the investor make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of...
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: State of Nature Decision Alternative s1 10 4 S2 d1 d2 (a) Suppose P(S1)-0.2 ad P(s2)-0.8. What is the best decision using the expected value approach? Round your answer in one decimal place The best decision is decision alternative d2 , with an expected value of 3.2 (b) Perform sensitivity analysis on the payoffs for decision alternative d1. Assume the...
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: State of Nature Decision Alternative s1 S2 101 4 (a) Suppose P(si)-0.2 and P(s2)-0.8. What is the best decision using the expected value approach? Round your answer in one decimal place. The best decision is decision alternative d2 v , with an expected value of 3.2 (b) Perform sensitivity analysis on the payoffs for decision alternative di. Assume the probabilities...
Most questions answered within 3 hours.
-
Consider the reaction, C3 H8 + O2 --> CO2 + H2O. How many
moles of O2...
asked 1 hour ago -
You and your opponent both roll a fair die. If you both roll the
same number,...
asked 1 hour ago -
In a study of the accuracy of fast food drive-through orders,
Restaurant A had 257 accurate...
asked 1 hour ago -
Identify and describe in detail the four categories of
institutions that could be included in a...
asked 1 hour ago -
In python
class Customer:
def __init__(self, customer_id, last_name, first_name, phone_number, address):
self._customer_id = int(customer_id)
self._last_name =...
asked 1 hour ago -
What is an example of a limitation in implementing a new
ERP system and how it...
asked 1 hour ago -
In a section of 9.7cm of an artery with a radius of 2.6mm there
is a...
asked 1 hour ago -
the two carboxylic acid groups of aspartic acid have different
acidities with pKa values of 2.1...
asked 1 hour ago -
Would CuCO3 aqueous salt combined with calcium chloride
form a solid precipitate? If so, what would...
asked 1 hour ago -
How do ECM Solutions assist in embedding a culture of continuous
improvement in an organization? (Project...
asked 1 hour ago -
Directions
These directions introduce the idea of Essential Questions.
Since this may be a new concept...
asked 1 hour ago -
1.b. Fiscal policy is said to suffer from ‘crowding out’.
Explain what this means and why...
asked 2 hours ago