View the step-by-step solution to:

# 2. Suppose you write an european put option? priced H = 4, at a strike price K = 50. Morover, the contract is valid for ID securities. Draw approxim

Hello, I'm stuck with these 2 exercises about options that I have to solve. Is there anyone who can help me? An explanation would be appreciated.

2. Suppose you write an european put option? priced H = 4, at a strike price
K = 50. Morover, the contract is valid for ID securities. Draw approxim—
ately your payoff at T. What is the maximum loss? What about the gain?
Consider r = CI. 3. You want to go speculative on a certain stock 5. Your available wealth is
W = 'If'j ODD euros. The current price SE 2 4D euros while the call option
Ct vnritten on the same underlyingJ with a strike price K = 43? costs 4. In
the case in which you can just chose one of the two instruments, what are
your alternative investment strategies? Describe the return proﬁle of the
strategies in the case in which 331 = 45. What if instead the price 3; was
48? Consider r = U.

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents