Please make sure to round intermediate calculations, thank you!

7. Problem 18.07 (Options) eBook Rachel is considering an investment in Yonan Communications, whose stock currently sells for $55. A put option on Yonan's stock, with an exercise price of $50, has a market value of $2.91. Meanwhile, a call option on the stock with the same exercise price and time until expiration has a market value of $9.04. The market believes that at the expiration of the options, the stock price will be $40 or $70 with coual probability a. What is the premium associated with the put option? The call option Round your answers to the nearest cent. The premium associated with the put option: $ The premium associated with the call option: $ b. If Yonan's stock price increases to $70, what would be the return to an investor who bought a share of the stock? If the investor bought a call option on the stock? If the investor bought a put option on the stock? Round your answers to two decimal places Investment Returns Own stock Buy cal option Buy put option C. If Yonan's stock price decreases to $40, what would be the return to an investor who bought a share of the stock? If the investor bought a cal option on the stock? If the investor bought a put option on the stock? Round your answers to two decimal places. Returns Investment Own stock Buy cal option Buy put option d. If Rachel buys 0.6 share of Yonan Communications and sells one call option on the stock, has she created a riskless hedged investment? What is the total value of her portfolio under cach scenario? Round your answers to the nearest cent. Rachel's investment strategy would yield a payoff of $ If the ending stock price is $40.00. Her investment strategy has a payoff of $ . if the ending stock price is $ 70.00 The strategies Select payoffs; therefore, this Select a riskless hedged portfolio c. IF Rachel buys 0.7 share of Yonen Communications and sells one call option on the stock, hes she created a riskless hedged investment? What is the total value of her portfolio under cach scenario? Round your answers to the nearest cent. Rachel's investment strategy would yield a payoff of f the ending stock price is $ 40.00. Her investment strategy has a payoff of $ if the ending stock price is $ 70.00. The strategies Select payoffs; therefore, this Select a risidess hedged portfolio 7. Problem 18.07 (Options) eBook Rachel is considering an investment in Yonan Communications, whose stock currently sells for $55. A put option on Yonan's stock, with an exercise price of $50, has a market value of $2.91. Meanwhile, a call option on the stock with the same exercise price and time until expiration has a market value of $9.04. The market believes that at the expiration of the options, the stock price will be $40 or $70 with coual probability a. What is the premium associated with the put option? The call option Round your answers to the nearest cent. The premium associated with the put option: $ The premium associated with the call option: $ b. If Yonan's stock price increases to $70, what would be the return to an investor who bought a share of the stock? If the investor bought a call option on the stock? If the investor bought a put option on the stock? Round your answers to two decimal places Investment Returns Own stock Buy cal option Buy put option C. If Yonan's stock price decreases to $40, what would be the return to an investor who bought a share of the stock? If the investor bought a cal option on the stock? If the investor bought a put option on the stock? Round your answers to two decimal places. Returns Investment Own stock Buy cal option Buy put option d. If Rachel buys 0.6 share of Yonan Communications and sells one call option on the stock, has she created a riskless hedged investment? What is the total value of her portfolio under cach scenario? Round your answers to the nearest cent. Rachel's investment strategy would yield a payoff of $ If the ending stock price is $40.00. Her investment strategy has a payoff of $ . if the ending stock price is $ 70.00 The strategies Select payoffs; therefore, this Select a riskless hedged portfolio c. IF Rachel buys 0.7 share of Yonen Communications and sells one call option on the stock, hes she created a riskless hedged investment? What is the total value of her portfolio under cach scenario? Round your answers to the nearest cent. Rachel's investment strategy would yield a payoff of f the ending stock price is $ 40.00. Her investment strategy has a payoff of $ if the ending stock price is $ 70.00. The strategies Select payoffs; therefore, this Select a risidess hedged portfolio