Solutions.xlsx - Question 1 a 1 European CALL option i.e it gives the option holder the right to buy the stock at $30 in Ma Bui can profit if the stock

Solutions.xlsx - Question 1 a 1 European CALL option i.e it...

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Question 1 a 1 Bui can profit if the stock trades above $32 in May No future liability and the maximum she would lose is her $2 premium if A Minimum Guaranteed Profit S - 30 - 2 Bui can profit if the stock trades above $38 in May No future liability and the maximum she would lose is her $3 premium if A Minimum Guaranteed Profit S - 35 - 3 2 American PUT option, i.e. it gives the option holder the right to sell the sto Bui can profit if the stock trades below $27 No future liability and the maximum she would lose is her $3 premium if Pe Minimum Guaranteed Profit 30 - 3 - S American PUT option, i.e. it gives the option holder the right to sell the sto Bui can profit if the stock trades below $28 No future liability and the maximum she would lose is her $2 premium if Pe Minimum Guaranteed Profit 30 - 2 - S b Strike Price = S Max Gain High Strike - Low Strike - Net Premium Max Loss Net Premium Breakeven Long Call Strike + Net Debit Paid c Max Loss - $8 Breakeven Price Above $68 or Below $52 Question 2 a. PV Year 0 -130000 1 36000 $31,304.35 2 160000 $120,982.99 3 126000 $82,847.05 4 100000 $57,175.32 5
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  • Fall '16
  • SyedAhmed
  • Strike price, Penny JC strike

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