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I just need 1, 2, 3, 4. Thank you. The current spot price of the stock of the Southwest Airlines (LUV) is 40.00. The current
I just need 1, 2, 3, 4. Thank you.
The current spot price of the stock of the Southwest Airlines (LUV) is 40.00. The current annual effective risk-free interest rate is 10.25%. The Forward Price for a 6-month forward contract on LIV stock is 42.00. A 6-month European style call option on LIV stock with a strike price of 40 has a premium of 1.50. A 6-month European style put option on LIV stock with a strike price of 40 has a premium of 3.50. 1. Create a payoff-profit table for a long forward contract. Use spot prices at expiration of 39-45 in increments of 1. 2. Create a payoff-profit table for a short forward contract. Use spot prices at expiration of 39-45 in increments of 1. 3. Create a payoff-profit table for LUV stock. Assume that you buy the stock now. Then you sell you stock in 6 months. Use spot prices in 6 months of 39-45 in increments of 1. 4. Create a payoff-profit table for the situation where you short LUV stock. Assume that you sell the stock now. Then you cover your position in the stock in 6 months. Use spot prices at expiration of 39-45 in increments of 1Step by Step Solution
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