Question: hello, hope you are doing well. I need help for these Qs 1- Assume that you buy 100 share of a smith Corp. stock at

 hello, hope you are doing well. I need help for these

hello, hope you are doing well. I need help for these Qs

Qs 1- Assume that you buy 100 share of a smith Corp.

1- Assume that you buy 100 share of a smith Corp. stock at $ 69. You also buy one smith Corp. put contract (100 securities) with June maturity, $ 65 strike price, and a current price of $ 1.25 per option what will be your profit or loss if the stock price falls to $ 60 by the exercise date in June? 2- You are optimistic about the stock of sunrise corporation. You are confident that the stock will go up (and you really know what you are doing). You have $ 10,000 to invest. What investment Strategy will be most profitable when the stock appreciates? a- Use all $ 10,000 to buy the stock long b- Use all $ 10,000 to sell the stock short c- Buy call options with your $ 10,000 d- Sell call options and save your $ 10,000 e- Buy put options with your $ 10,000 3- Stanford Fernwillow is cautiously optimistic about Titanic Corporation stock. Stanford thinks that the stock will probably go up but acknowledges the possibility that it could plummet in value. Stanford is Risk averse, but would like to buy Titanic stock if he could guarantee that he would not lose big if the stock sinks. Which of the fooling investment strategy might be attractive to Mr. Fernwillow? a- Buy only call options on Titanic stock b- Buy 50% of Titanic stock long and use the remaining 50% to buy Titanic stock short. c- Buy Titanic stock and buy an equal number of call options based on Titanic stock d- Buy only put options on Titanic stock e- Buy Titanic stock and buy an equal number of put options based on titanic stock 4- Assume that your broker has phobias about spiders and put options. You desperately want to buy options relating to IBM but you feel loyal to your broker and you understand the problems that face with phobias and fetishes ............ anyway, you decide to construct your own put on IBM while using your broker. The net price you pay will be equal to the selling price of the put. What is the Strategy? a- Buy one stock, buy one call, and invest E/(1+r) in T-bills. b- Buy one stock, buy one call, and borrow E/(1+r) in T-bills. c- Short sell one stock, buy one call, and invest E/(1+r) in T-bills. d- Short sell one stock, buy one call, and borrow E/(1+r) in T-bills. e- I feel sick 5- Suppose you short sell 100 shares of IBM now selling at $ 120 per share what is your maximum possible gain and loss? 6- Assume that you own 10,000 shares of ABC company stock. Because of a few unfortunate results at the \"track\" you owe a few men a large sum of money. You don't want to cash in your investment in ABC stock because you feel it has excellent long term potential and there are imbedded tax liabilities. what option strategy will generate cash flow to pay your debts without borrowing money or selling the stock? a- Buy a call for each share you own b- write a call for each share you own c- Buy a put for each share you own d- write a put for each share you own 7- a put option and a call option with exercise price of $ 65 and three months to expiration sell for $ 2,87 and $ 4.08, respectively. If the risk-free is 4.8 percent per year. compounded monthly, what should the stock sell for? 8- a stock is currently selling for $38/ Share. A call option with an exercise price of $40/ share sells for $3.80 and expires in three months. If the risk - free rate is 3.6% per year. What is the price of a put option with the same exercise price? 9- There are two elements to a successful signal (costly and penalty for lying). In regard to the signal of Quality provide by a college degree, which one of the following statements best reflects what is meant by the costly element? a- Going to college is expensive and the cost is necessarily more burdensome for low -quality job. b- Going to college is expensive and the cost is necessarily more burdensome for high -quality job candidates. c- Completing the academic requirements of college is necessarily more burdensome for low -quality job candidates. d- Completing the academic requirements of college is necessarily more burdensome for low -quality job candidates. e- Completing the academic requirements of college is necessarily more burdensome for high -quality job candidates. 10- \"homemade\" dividends\" support the ----------------------- school of thought regarding dividends. a- Dividends are good b- Dividends are bad c- Dividends don't matter d- Clientele effect e- Something is wrong with the statements and, thus, it doesn't support any of the above. 11- \"firms shouldn't change their dividend policy because their shareholders approve of their existing policy.\" This statements support the --------------- school of thought regarding dividends. a- Dividends are good b- Dividends are bad c- Dividends don't matter d- Clientele effect e- Something is wrong with the statements and, thus, it doesn't support any of the above. 12- Which one of the following statements is true about the winner' course? a- The scenario arises when homogenous goods are exchange between buyers and sellers who know equal amounts about the good. b- The scenario arises when homogenous goods are exchange between buyers who know more about the good and sellers who know less. c- The scenario arises when homogenous goods are exchange between buyers and sellers who know equal amounts about the good. d- The scenario arises when homogenous goods are exchange between buyers who know more about the good and sellers who know less

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