Pierre purchases a put option on Altec that has a strike price of $12 and a premium of $1. Altec's stock price is now at $5. What is the MAXIMUM profit that Pierre can hope to earn on this put option? You buy a straddle (a call and a put on the same underlying asset with the same exercise price and with the same time to expiration) XYZ whose exercise price on the call and put is $35. The premium on the call is $2.25 and the premium on the put is $8.00. Calculate the straddle's profit or loss if just prior to expiration XYZ's stock price is $10 per share. Consider a project with an initial investment of $50,000 and a 5 year life. Project inflows are $25,000 each year and project outflows are $13,000 each year. Depreciation is calculated on a straight line method. If the cash flow in Year 1 is $11,700, what is the tax rate? Which of the following is true about forming a portfolio of two stocks when the correlation coefficient between them is equal to 0.00? The portfolio has some potential to diversify risk. O The portfolio has no potential to diversify risk The portfolio has maximum potential to diversify risk. None of the Above Coolmist is a company that produces high quality juices from scratch. One of their best products is orange juice, and they have orange groves that provide the chief raw material to their operations. One of the risks faced by the company is that the growing process from start (planting) to finish (extraction of juice) takes many months, and because they have no control over the global price of orange juice, their business has significant price risk. Coolmist is considering the use of options on the price of orange juice per pound as a way to hedge this risk. Which of the following option positions would you recommend