QuestionQuestion

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 PreviewSolution 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
    $60.00 for this solution

    PayPal, G Pay, ApplePay, Amazon Pay, and all major credit cards accepted.

    Find A Tutor

    View available Finance Tutors

    Get College Homework Help.

    Are you sure you don't want to upload any files?

    Fast tutor response requires as much info as possible.

    Decision:
    Upload a file
    Continue without uploading

    SUBMIT YOUR HOMEWORK
    We couldn't find that subject.
    Please select the best match from the list below.

    We'll send you an email right away. If it's not in your inbox, check your spam folder.

    • 1
    • 2
    • 3
    Live Chats