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Please answer all 3 correctly thank you 1. Imagine that you are holding 5,900 shares of stock, currently selling at $70 per share. You are

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1. Imagine that you are holding 5,900 shares of stock, currently selling at $70 per share. You are ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. If you continue to hold the shares until January, however, you face the risk that the stock will drop in value before year-end. You decide to use a collar to limit downside risk without laying out a good deal of additional funds. January call options with a strike price of $75 are selling at $6, and January puts with a strike price of $65 are selling at $7. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at $56, $70, $76? What will the value of your portfolio be if you simply continued to hold the shares? Stock Price $56 $70 $76 Portfolio Value If collar is used If you continued to hold the shares S S$ 2. You buy a share of stock, write a one-year call option with X $28, and buy a one-year put option with X- $28. Your net outlay to establish the entire portfolio is $26.70. What must be the risk-free interest rate? The stock pays no dividends. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Risk-free rate 3. An investor buys a call at a price of $5.10 with an exercise price of $46. At what stock price will the investor break even on the purchase of the call? (Round your answer to 2 decimal places) Break even price $

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