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urgent You are required to answer the following questions by showing relevant workings. a. The exercise price for Periuk Belanga Berhad's stock is RM48. This
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You are required to answer the following questions by showing relevant workings. a. The exercise price for Periuk Belanga Berhad's stock is RM48. This stock is currently selling at RM52. The option has 120 days to expiration. The annual risk-free interest rate is 7%. The standard deviation has been estimated to be 30% per year. From the above information, find out the Call and Put price of option. (8 Marks) b. Juliet, a financial manager of Badak Berendam Berhad, buys call options on 50,000 barrels of oil with an exercise price of RM140 per barrel. Juliet simultaneously enters the put option on 50,000 barrels of oil with the price of RM40 per barrel. Find out her gains and losses if oil prices are RM135, RM137, RM140, RM143 and RM145. Interpret your findings. (12 Marks)Step by Step Solution
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