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investment 2) An investor has 80,000 EGP which will be invested in a long-put option contract, the premium per share is 20 EGP. If the
investment
2) An investor has 80,000 EGP which will be invested in a long-put option contract, the premium per share is 20 EGP. If the market price of the stock on the exercise date is 50 EGP, and the strike price is 56 EGP. 2 1 a) What is the value of the contract on the exercise date? and determine whether it's in the money, out of the money, or at the money? And why? b) What is the rate of return? 3) If you are sure that the price of stock X would increase dramatically within 4 months. Which type of derivative contract would you invest in? and why? 4) A stock that has a current price of 50 EGP, and a strike price of 47 EGP has an associated put option priced at 4 EGP per contract. What is the intrinsic value pf this put, and what is the time value Step by Step Solution
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