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Question 8 (Mandatory) (3.125 points) Consider a put option that gives the long position the right to sell the underlying asset for $14.26 in 0.5

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Question 8 (Mandatory) (3.125 points) Consider a put option that gives the long position the right to sell the underlying asset for $14.26 in 0.5 years. The continuously compounded risk free rate of interest is 1.25%. The market price of the underlying asset is $14.70. By how much will the option increase in value as the volatility of the underlying asset's returns increases from 25% to 95%? Please input your answer to the closest cent (hence, your answer must include two digits past the decimal). Please do not use commas or dollar signs. An Excel file can be accessed through clicking the following link: ForwardandOptionValuation.xls A a Question 10 (Mandatory) (3.125 points) Consider a call option where K = $35.43; St = $54.65; and c =$18. Please calculate the short position's profit. Please input your answer to the closest cent (hence, your answer must include two digits past the decimal). Please do not use commas or dollar signs. A Question 11 (Mandatory) (3.125 points) Which of the following accurately characterizes a short forward position? Directionally bearish Directionally bullish Directionally neutral Directionally tangent Question 15 (Mandatory) (3.125 points) Consider a forward contract with expiration in 13.43 years. The continuously compounded risk free rate of interest is 0.65%. The forward price is $135,456.65. The market price of the underlying asset is $135,816.23. By how much will the forward contract change in value if the continuously compounded risk free rate of interest doubles? Please input your answer to the closest cent (hence, your answer must include two digits past the decimal). Please do not use commas or dollar signs. An Excel file can be accessed through clicking the following link: ForwardandOptionValuation(1).xls

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