Options, Futures, and Other Derivatives with Derivagem CD (7th Edition)

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Chapter 8 Homework Solution 1. Breakeven at S T = 40 – 3 = $37 Profitable for S T < $37 Exercised if S T < $40 (0,37) – (40,-3) – (∞,-3) 2. Breakeven at S T = 50 + 4 = $54 Profitable for S T < $54 Exercised if S T > $50 (0,4) – (50,4) – (∞,-∞) 9. Breakeven at S T = 100 + 5 = $105 Profitable for S T > $105 Exercised if S T
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Unformatted text preview: &gt; $100 (0,-5) (100,-5) (,) 10. Breakeven at S T = 60 8 = $52 Profitable for S T &gt; $52 Exercised if S T &lt; $60 (0,-52) (60,8) (,8) 17. a. 500 * 1.10 = 550 shares 40 / 1.10 = $36.36 strike b. No change c. 500 * 4 = 2000 shares 40 / 4 = $10 strike...
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