Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The investor took a long put position in three WIG-20 option contract. a) Calculate the price of the option if the total profit (loss) was
The investor took a long put position in three WIG-20 option contract. a) Calculate the price of the option if the total profit (loss) was (-1080PLN) at the expiring of the option. b) Using the price of option from a), propose the strike price of the contract and the value of WIG-20 at the time of expiring of these options in case the investor has profit of 1080PLN C) Assume that the strike price of the above call option is 2600, indicate what instrument you need to invest in to construct Synthetic Long Call strategy. Provide informations on the characteristic of gains, looses end expectations of investor. Calculate the profit/loss from this strategy if WIG-20 at the expiring will be 2640. The investor took a long put position in three WIG-20 option contract. a) Calculate the price of the option if the total profit (loss) was (-1080PLN) at the expiring of the option. b) Using the price of option from a), propose the strike price of the contract and the value of WIG-20 at the time of expiring of these options in case the investor has profit of 1080PLN C) Assume that the strike price of the above call option is 2600, indicate what instrument you need to invest in to construct Synthetic Long Call strategy. Provide informations on the characteristic of gains, looses end expectations of investor. Calculate the profit/loss from this strategy if WIG-20 at the expiring will be 2640
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