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Mr. X will retire at the age of 60 years. He wishes to have an amount of $200,000 in his account at the time of
Mr. X will retire at the age of 60 years. He wishes to have an amount of $200,000 in his account at the time of retirement. Currently he is of the age of 40 years and has an amount of $25,000 in hand. How much interest rate a bank should offer so he has the desired amount at retirement. A. 11.00% B. 10.50% C. 10.96% D. 12.00% The 3-month maturity put option price is $6 with a strike price of $60 on the asset that is currently trading at $55. If the annual risk-free rate is 8%, what is the price of a 3-month maturity call option with a strike price of $60 on the same asset? If the investor writes 3- months call option and the future spot price of the asset is $65, what is the net profit/loss to the investor. Calculate the price of the call option and the net profit/loss to the investor. (A) The price of the call option is $2.18 and the net loss to the investor is $2.82. (B) The price of the call option is $6.00 and the net profit to the investor is $1.00. (C) The price of the call option is $4.82 and the net loss to the investor is $4.82. (D) The price of the call option is $5.00 and the net profit to the investor is $0.00
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