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Unformatted text preview: of underlying asset is 109 3/8 d) (6 pts) From the above tables, estimate your wealth change on March 16, 2001 given you hedged your 1000 share long SUNW position Nov.7, 2000 using the cheapest “in the money” option. Explain your hedge. (Show your calculation work for partial credit.) buy the 110 at a cost of 7 ⅜, 1000 * 7 3/8 = 7375 whata? $139,000? What’s the answer?!?! 2) Assume you are long one T-bond at 6% with 20 years to maturity and a current price of 105:00. Using the “insert shape” tool, graph the value line for this long position. Graph the value line for a futures position hedge and the net wealth position on the graph below. Use different line forms and clearly label your lines (7 pts)...
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- Fall '10
- Strike price, net wealth position, SUNW position Nov.7, futures position hedge