Question

Answer the following questions:

Use the following info for problems 1 and 2

Stock price=$33.50
Risk free dividends=8.00%
Dividends=$0
Put premium=$0.50
Put delta=-0.181
Striking price=$30
Time until expiration in June=77 days
Volatility=33%
Call premium=$4.50
Call delta=0.819


1.)Suppose you own 10,000 shares of tis stock and you buy 50 of these Jun 30 puts (puts on 5,000 shares).What is your position delta.?

2.)If you have a position delta of zero, you are delta neutral. How many puts do you have to buy to become delta neutral? What would this cost?

Chapter 23 1,2 and 4

1.)The newspapers price for a T-bill futures contract is 93.33.What is the value of the T-bills promised at delivery based on this price?

2.)A speculator goes long for T-bill contracts at 93.34 and closes them out three weeks after at 93.40.Calcualte this persons gain or loss in dollar terms.

4.)A $ 10,000 T -bill comes due in eighty-eight days and sell for $ 9,800 calculate the following:
a.)the ask discount
b.)the bond equivalent yield.

Chapter 25 2

2.)You own 1,000 shares of XYZ and have purchased ten protective put contracts.The puts have a delta of -0.317
a.)What is your position delta?
b.)Instead of buying puts,how many of your shares should you sell short to achieve the same result?

Solution Preview

This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.

Finance Questions

This is only a preview of the solution. Please use the purchase button to see the entire solution

Related Homework Solutions

Finance Questions
Homework Solution
$68.00
Business
Finance
Tax
Payable
Risk
Project
Company
Derivative
Relief
Dividend
Policy
Finance Questions
Homework Solution
$33.00
Finance
Business
Management
Stocks
Government
Money Market
Probability Distribution
Risk
Functions
Equations
Correlation
Proportions
Portfolio
Companies
T-Bill Rates
Percentage
CML
Data
Trade Barriers and Public Sector Corruption by Country (440 words)
Homework Solution
$65.00
Business
Finance
Public Sector Corruption
Pharmaceutical Company
India
Chile
Canada
China
Turkey
Corruption Perception Index
Social Development
Investments
Intellectual Property Rights
Finance Questions
Homework Solution
$50.00
Business
Finance
Company
Expand
Operation
Building
Debt
Capital
Structure
Dividend
Income
Business and Finance: Hospital Management
Homework Solution
$90.00
Accounting
Business
Finance
Economy
Hospital Management
Tax
Research
Costs
Equipment
Salaries
Pediatric Unit
Benefits
Expenses
Revenue
Payback Period
Cash Flow
NPV
IRR
NPV Of The Alternative
Homework Solution
$5.00
Accounting
Business
Finance
Economics
Microsoft Excel
Alternatives
NPV
Rounding Numbers
Constant Dollars
Payments
Cash
Tables
Get help from a qualified tutor
Live Chats