Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer these. Hicrosoft stock is currently trading at $305.00 per share. Assume that the dividend yield is 0 and the annual risk-free rate is

please answer these.
image text in transcribed
image text in transcribed
image text in transcribed
Hicrosoft stock is currently trading at $305.00 per share. Assume that the dividend yield is 0 and the annual risk-free rate is 2%. You calculate the standard deviation of stock returns to be 35\% (0.35). What is the hedge-ratio (the option ) of a 6-month Microsaft call option with a strike price of $310 ? (Wote: Please use the Cumulative Normal Distribution table attached to the formula sheet) 0.3520 0.26 0.6065 07324 If an option is exercised, the short position... has a positive payoff, as the option was exercised. has a negative payoff, and must forfeit the option premium. has a negative payoff, but still keeps the option premium. has a positive payoff, and must forfeit the option premium. Assume that two parties have a short and lorg position to seil and buy 200,000 bushels of corn, respectively, for $10.00 per bushel. The delivery date is $ months from now. Aa Initial margin of 10% is required. Over the next 5 months, the futures price is as follows: What is the value of the short positioe's marein account in month 32 $350,000 5150,000 $50,000 4200,000

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_2

Step: 3

blur-text-image_3

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

The Financial Services Marketing Handbook

Authors: Evelyn Ehrlich

2nd Edition

1118065719, 978-1118065716

More Books

Students also viewed these Finance questions