Question
question 3.0 Alex invests in UHUCoin at a price of 100'SH, and she also believes that there is a small chance of a significant increase
question 3.0
Alex invests in UHUCoin at a price of 100'SH, and she also believes that there is a small chance of a significant increase in the price over the next year. As Alex is not able to afford a further UHUCoin, she decides to go long by buying a call option, expiring in 1 year, with an exercise price of 110 $H, for a premium of 4.5 SH. As Alex is a true believer in a significant increase in the UHUCoin's price over the next year, she decides to lower her costs by selling a put option, expiring in 1 year, with an exercise price of '80 $H, for a premium of 3 $H.
required
Please calculate Alex' overall profit assuming an UHUCoin price at maturity of $120.5. Round your answer to 1 decimal place
Please calculate Alex overall profit assuming an UHUCoin price at maturity of $69. Round your answer to 1 decimal place.
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