20. You are the purchaser of a put option where the premium is $6 and exercise price is $52. You bought this option when the stock price was $50. If the stock price is $54 right now (and you're at expiration), what is your net cash flow from this investment? (Points : 3.84)

negative $4 negative $6 $4 negative $2 $2

Question 21. 21. The maximumloss of the purchaser of a put option with a premium of $3 and exercise price of $120 would be: (Points : 3.84)

unlimited $120 $117 $3 $123

Question 22. 22. The maximum gain of the writer of a call option with a premium of $3 and an exercise price of $120 would be (Points : 3.84)

unlimited $3 $117 $120 $123

Question 23. 23. You have the following information: S=52, X=50, T=1, r=0, C=5, P=5 Evaluating the situation from a Put-Call Parity framework, what steps would you take to implement an arbitrage strategy? (Points : 3.84)

Sell Call, Buy Put, Short Stock, Invest remainder Sell Call, Buy Put, Buy Stock, Borrow remainder Buy Call, Sell Put, Buy Stock, Borrow remainder Buy Call, Sell Put, Short Stock, Invest remainder Buy Call, Sell Put, Short Stock, Borrow remainder

Question 24. 24. Using the information and the solution from the previous question (Q23), what would be the final arbitrage amount? (approximately) (Points : 3.84)

If S>X or SX then $7, if SX or SX then $3, if SX or S

Question 25. 25. You have the following information: S=18, E=15, r=2%, t=3 (years), standard deviation=0.25 Using the Black-Scholes Model, calculate the approximate Call price (Points : 4)

$2.33 $5.10 $4.05 $1.59 $7.21

Question 26.26. You have the following information:

Put: X=$40, Premium=$4

Call: X=$50, Premium=$6

You bought the stock at $45

Scenarios: S=15, S=45, S=55

Given above information, please calculate the net payouts for a collar strategy for each different scenario.

(Points : 3.84)

-$3, $2, $7 -$30, $0, $10 -$28, $2, $12 -$4, $0, $6 $4, $0, -$6