You own (are long) a call with an exercise price of 95 and a put at 115 You are long a call at 100, and short a put at 105 Long a call at 90, long a put at 97, and long one share of the stock Short three calls at 102, long four puts at 97, short five shares of stock You buy three shares of Walmart stock for 85 each, and four six month put options at 81 for 3 964 each You sell five six month call options at 88 for 5 296 each You hold your portfolio until the expiration date On the expiration date you cash out your portfolio Graph the profits of your strategy as the price of Walmart stock at the expiration date goes from 70 to 100 Profits equal the amount you receive at the expiration date for cashing out your portfolio minus the amount you paid for the portfolio You own a share in Second Wind Holdings Inc Every period it has a 12 percent chance of going bankrupt The interest rate is 0 If it survives to the end of the first period, it will pay $22 in dividends, $17 in dividends at the end of the second period, $12 in dividends at the end of the third period, and $43 in dividends at the end of the fourth period It will pay no dividends after the end of the fourth period What is its efficient market price at the beginning of the first period B Moon Power Technologies Inc (MPT) has an eight percent chance of going bankrupt each period In period seven it will pay $750 if it survives The interest rate is 0 Prior to that point, and afterwards, it will pay nothing What is the efficient market price for MPT at the beginning of period 1

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Posted on Sep 22, 2024

You own (are long) a call with an exercise price of 95 and a put at 115. You are long a call at 100, and

You own (are long) a call with an exercise price of 95 and a put at 115.

You are long a call at 100, and short a put at 105.

Long a call at 90, long a put at 97, and long one share of the stock.

Short three calls at 102, long four puts at 97, short five shares of stock.

You buy three shares of Walmart stock for 85 each, and four six month put options at 81 for 3.964 each. You sell five six-month call options at 88 for 5.296 each. You hold your portfolio until the expiration date. On the expiration date you cash out your portfolio. Graph the profits of your strategy as the price of Walmart stock at the expiration date goes from 70 to 100. Profits equal the amount you receive at the expiration date for cashing out your portfolio minus the amount you paid for the portfolio.

: You own a share in Second Wind Holdings Inc. Every period it has a 12 percent chance of going bankrupt. The interest rate is 0. If it survives to the end of the first period, it will pay $22 in dividends, $17 in dividends at the end of the second period, $12 in dividends at the end of the third period, and $43 in dividends at the end of the fourth period. It will pay no dividends after the end of the fourth period What is its efficient market price at the beginning of the first period?

B: Moon Power Technologies Inc. (MPT) has an eight percent chance of going bankrupt each period. In period seven it will pay $750 if it survives. The interest rate is 0. Prior to that point, and afterwards, it will pay nothing. What is the efficient market price for MPT at the beginning of period 1?