FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I own a stock at $100 and I'm worried it will go down 50% in the next month to $50, so I buy a one

I own a stock at $100 and I'm worried it will go down 50% in the next month to $50, so I buy a one month put option with a $70 strike for $3.

The stock does indeed fall to $50. What is my profit from the put option?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance An International Perspective

Public Finance An International Perspective

Authors: Joshua E. Greene

1st Edition

9814365041, 978-9814365048

More Books

Students also viewed these Finance questions

Question

=+a) A 95% prediction interval for a customer with a household income of $80,000 is ($35.60, $55.60). Explain to the restaurant owner how she should interpret this interval. b) A 95% confidence...

Answered: 1 week ago

Question

★★★★★
On December 31, 2014, Zunniga Corp. issues 4%, 10-year convertible bonds payable with a maturity value of $5,000,000. The semiannual interest dates are June 30 and December 31. The market interest...

Answered: 1 week ago

Question

★★★★★
I own a stock at $100 and I'm worried it will go down 50% in the next month to $50, so I buy a one month put option with a $70 strike for $3. The stock does indeed fall to $50. What is my profit from...

Answered: 1 week ago

Question

★★★★★
QUESTION 2 Choose the item that is FALSE regarding VARIABLE costing D. Variable .When units The cost per unit is NOT affected by changes in production volume VARIABLE MANUFACTURING costs flow through...

Answered: 1 week ago

Question

★★★★★
Graff, Incorporated, has sales of $49,800, costs of $23,700,depreciation expense of $2,300, and interest expense of $1,800. Thetax rate is 22 percent. What is the operating cash flow, or OCF?Note:...

Answered: 1 week ago

Question

★★★★★
Activity Overview: In this graded activity, students will determine subnet scopes, assess routing metrics and paths, identify aspects of ACL's and Firewalls, and design an IPv4 address space. ...

Answered: 1 week ago

Question

★★★★★
Your problem statement assignment will include the following: A brief, yet clear and explicit description of the organization. A description of the problem being observed or experienced in the...

Answered: 1 week ago

Question

★★★★★
TODO: Test 2 - Create the GetArea() member method * ================================================== * Inside the Circle class within your Shape.cpp file, * create a new member method called...

Answered: 1 week ago

Question

★★★★★
Loomis inc received 90,000 on march 1 year 2 for work to be performed Over the next six months. The company which has a fiscal year end of June 30 records revenue evenly over the period of work...

Answered: 1 week ago

Question

★★★★★
4. What are the principal technologies and standards for wireless networking, communication, and Internet access?

Answered: 1 week ago

Question

★★★★★
1. Should managers monitor employee e-mail and Internet usage? Why or why not? The Internet has become an extremely valuable business tool, but its also a huge distraction for workers on the job....

Answered: 1 week ago

Question

★★★★★
1. What is net neutrality? Why has the Internet operated under net neutrality up to this point in time? What kind of Internet user are you? Do you primarily use the Net to do a little e-mail and...

Answered: 1 week ago

Previous Question Next Question