der_p3-1 - Derivative Strategy Name 1. A strategy consists...

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Unformatted text preview: Derivative Strategy Name 1. A strategy consists of buying a market index product at $830 and longing a put on the index with a strike of $830. If the put premium is $18.00 and interest rates are 0.5% per month, what is the profit or loss at expiration (in 6 months) if the market index is $810? A. $20.00 gain B. $18.65 gain C. $36.29 loss D. $43.76 loss 2. A strategy consists of buying a market index product at $830 and longing a put on the index with a strike of $830. If the put premium is $18.00 and interest rates are 0.5% per month, compute the profit or loss from the long put position by itself (in 6 months) if the market index is $810. A. $3.45 gain B. $1.45 gain C. $2.80 loss D. $1.36 loss 3. A strategy consists of buying a market index product at $830 and longing a put on the index with a strike of $830. If the put premium is $18.00 and interest rates are 0.5% per month, what is the estimated price of a call option with an exercise price of $830? A. $42.47 B. $45.26 C. $47.67 D. $49.55 4. A strategy consists of longing a put on the market index with a strike of 830 and shorting...
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This note was uploaded on 02/27/2012 for the course FINANCE 101 taught by Professor Yuy during the Spring '12 term at Centenary College New Jersey.

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der_p3-1 - Derivative Strategy Name 1. A strategy consists...

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