Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer question D Problem 21-9 Data: So = 107; X = 114; 1+r=108. The two possibilities for Spare 155 and 73 a. The range

image text in transcribed
image text in transcribed
please answer question D
Problem 21-9 Data: So = 107; X = 114; 1+r=108. The two possibilities for Spare 155 and 73 a. The range of Sis 82 while that of Pis 41 across the two states. What is the hedge ratio of the put? (Round your answer to 2 decimal places. Negative value should be indicated by a minus sign.) Answer is complete and correct. Hedge ratio (0.50) b. Form a portfolio of one share of stock and two puts. What is the (nonrandom) payoff to this portfolio? Answer is complete and correct. Nonrandom payoff $ 155 c. What is the present value of the portfolio? (Round your answer to 2 decimal places.) Answer is complete and correct. Present b. Form a portfolio of one share of stock and two puts. What is the (nonrandom) payoff to this portfolio? Answer is complete and correct. Nonrandom payoff $ 155 c. What is the present value of the portfolio? (Round your answer to 2 decimal places.) Answer is complete and correct. Present d. Given that the stock currently is selling at 107, calculate the put value. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Put value $ 32.70 Problem 21-9 Data: So = 107; X = 114; 1+r=108. The two possibilities for Spare 155 and 73 a. The range of Sis 82 while that of Pis 41 across the two states. What is the hedge ratio of the put? (Round your answer to 2 decimal places. Negative value should be indicated by a minus sign.) Answer is complete and correct. Hedge ratio (0.50) b. Form a portfolio of one share of stock and two puts. What is the (nonrandom) payoff to this portfolio? Answer is complete and correct. Nonrandom payoff $ 155 c. What is the present value of the portfolio? (Round your answer to 2 decimal places.) Answer is complete and correct. Present b. Form a portfolio of one share of stock and two puts. What is the (nonrandom) payoff to this portfolio? Answer is complete and correct. Nonrandom payoff $ 155 c. What is the present value of the portfolio? (Round your answer to 2 decimal places.) Answer is complete and correct. Present d. Given that the stock currently is selling at 107, calculate the put value. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Put value $ 32.70

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

Urban Public Finance

Authors: D. Wildasin

1st Edition

0415851882, 978-0415851886

More Books

Students also viewed these Finance questions