Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Price Call Call Call Put Put Put Apr May Jun Apr May Jun 540 16.70 17.40 17.70 .80 .80 .90 550 9.10 9.90 10.20 5.10
Price | Call | Call | Call | Put | Put | Put |
| Apr | May | Jun | Apr | May | Jun |
540 | 16.70 | 17.40 | 17.70 | .80 | .80 | .90 |
550 | 9.10 | 9.90 | 10.20 | 5.10 | 5.30 | 5.40 |
1)Alpha company is supposed to deliver 200 ounces of gold to the market in April. The company needs to hedge the position at the 550-exercise price. How much will the company receive in total, including the option premium, for the 200 ounces of gold if the market price of gold is $552 in April? (Gold - 100 troy oz.; $ per troy oz.)
2)What position has been taken by the company? When would the company have a loss/gain?
i need answer fast
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started