Question: Please use the information provided below to answer problems 3-4: Assume that you instead have shorted a call on the Intuit stock at a strike

Please use the information provided below to answer problems 3-4:

Assume that you instead have shorted a call on the Intuit stock at a strike price of 36. The option will expire in exactly three months time.

Problem 3

If the stock is trading at 46 in three months, how much will you owe? State you answer rounded off to two decimal points.

Problem 4

If the stock is trading at 32 in three months, how much will you owe? State you answer rounded off to two decimal points.

Problem 5

Dynamic Energy Systems stock is currently trading for 32 per share. The stock pays no dividends. A one-year European put option on Dynamic with a strike price of 41 is currently trading for 9.18. If the risk-free rate of interest is 10% per year, what is the price of a one-year European call option on Dynamic with a strike price of 41? State you answer rounded to two decimal points.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

investments and financial strategies assigbment please solve in external paper and post the answer thank you 1. The following are prices of options traded on Microsoft Corporation, which pays no...

Black-Scholes Model Assume that you have been given the following information on Purcell Industries' call options: Current stock price = $15 Strike price of option = $14 Time to maturity of option =...

CAN YOU PLEASE SHOW YOUR WORK IN EXCEL CLEARLY Black-Scholes Model Assume that you have been given the following information on Purcell Industries' call options: = = $13 Strike price of option...

ZOS KITCHEN CASE DISCUSSION 1. What has made Zos Kitchen successful so far? Briefly describe the key elements of Zos Kitchens business model that have contributed to its success. 2. From the point of...

These Questions were graded incorrect. Please provide correct answer and explanation as to why my answers are wrong Table 1 David Michael Q1A call option expiring in 2 months has a market price of...

Need help with the 70 multiple choice questions for final exam - if you can, please provide explanation for harder questions. A s ae o . s h r d n. . Surname: ______________________ Q1 Given names:...

Please, I need help with the calculations for the following 25 problems in the "final" tab of the workbook before 9pm CST. FINC 340 Quizzes 1 2 Derivatives can be strictly defined as Financial...

You own a call option on the Intuit stock with a strike price of 36. The option will expire in exactly three months time. Assume that you instead have shorted a call on the Intuit stock at a strike...

1. Identify the correct statement from the following alternatives: 1. The value of a currency forward contract is the present value of the forward rate at expiration minus the spot rate discounted at...

I have the following completed: 1120, 2220,1125 A , 1125 E I need the following forms completed asap:SCHEDULE D and G form 4562, form 4797 schedule detail M-1 it should be fairly easy to do the rest...

This assignment provides you the opportunity to make a Data Flow Diagram based on a narrative. NARRATIVE: The purpose of the Give Me a Break Insurance system is to find the lowest-cost automotive...

An athlete whose event is the shot put releases a shot. When the shot whose path is shown by the graph to the right is released at an angle of 40, its height, f(x), in feet, can be modeled by...

Sunland Company must decide whether to make or buy some of its components. The costs of producing 5 9 , 9 0 0 switches for its generators are as follows. Instead of making the switches at an average...

6 KIC, Inc., plans to issue $4 million of bonds with a coupon rate of 6 percent and 20 years to maturity. The current market interest rates on these bonds are 11 percent. In one year, the interest...