QUESTIONS Virgin Pacific Airlines has a 2-year project with the following cash flows: I =-1,000; C = 4,495, and C2 = -3,562 (all cash flows in dollars). Find the value of the SMALLEST IRR of this project. Give the answer as a percent with two decimals but do not include the symbol in your answer. Thus, if you believe the correct answer is 23.2356%, then write 23.24, not 0.2324 nor 23.24%. (Acceptable error -0.5%) QUESTION 9 You form a collar by buying a put with an exercise price of X1 = $58 and a premium of P and selling a call with an exercise price of X2 = $98 and a premium of C = $3. Both options mature in 11 months, and both have the same underlying asset. In addition, you buy the underlying asset for its current spot price of S = $74. Find the profit at expiration of this collar if the underlying asset's price at expiration is $85. Do not use the $ symbol in your answer; just write a numerical value. Of course, include the negative sign if the profit is negative; but do not include the positive sign if the profit is positive. (Acceptable crror = $1) QUESTION 10 You form a short straddle by selling a call with a premium of C = $9, and selling a put with a premium of P= 88. Both options have an exercise price of X = $43, both mature in 4 months, and both have the same underlying asset. Find the profit of this straddle when the price of the underlying asset is S = $75. Do NOT use the symbol in your answer; just write a numerical value. Of course, include the negative sign if the answer is negative; but do not include the positive sign if the answer is positive. (Acceptable crror=S1) QUESTIONS Virgin Pacific Airlines has a 2-year project with the following cash flows: I =-1,000; C = 4,495, and C2 = -3,562 (all cash flows in dollars). Find the value of the SMALLEST IRR of this project. Give the answer as a percent with two decimals but do not include the symbol in your answer. Thus, if you believe the correct answer is 23.2356%, then write 23.24, not 0.2324 nor 23.24%. (Acceptable error -0.5%) QUESTION 9 You form a collar by buying a put with an exercise price of X1 = $58 and a premium of P and selling a call with an exercise price of X2 = $98 and a premium of C = $3. Both options mature in 11 months, and both have the same underlying asset. In addition, you buy the underlying asset for its current spot price of S = $74. Find the profit at expiration of this collar if the underlying asset's price at expiration is $85. Do not use the $ symbol in your answer; just write a numerical value. Of course, include the negative sign if the profit is negative; but do not include the positive sign if the profit is positive. (Acceptable crror = $1) QUESTION 10 You form a short straddle by selling a call with a premium of C = $9, and selling a put with a premium of P= 88. Both options have an exercise price of X = $43, both mature in 4 months, and both have the same underlying asset. Find the profit of this straddle when the price of the underlying asset is S = $75. Do NOT use the symbol in your answer; just write a numerical value. Of course, include the negative sign if the answer is negative; but do not include the positive sign if the answer is positive. (Acceptable crror=S1)
