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North South FIN 433 - Practice Questions on Ch 14

Course: Fin 433-
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Practice Questions on Ch 14:Make sure you identify the maximum loss, maximum gain and break-even stock price for the position or positions! Problem 1. Draw the profit-loss diagram of the following option position:a) S0 (Spot price now) = $55, K (Strike Price) = $61, t = 6 month, Long call, C0 = $3b) S0 (Spot price now) = $55, K (Strike Price) = $55, t = 6 month, Long call, C0 = $4c) S0 (Spot price now) = $55, K (Strike Price) = $50, t = 6 month, Long call, C0 = $9Problem 2. Draw the profit-loss diagram of the following option position:a) S0 (Spot price now) = $55, K (Strike Price) = $50, t = 6 month, Long put, P0 = $2.50b) S0 (Spot price now) = $55, K (Strike Price) = $55, t = 6 month, Long put, P0 = $4c) S0 (Spot price now) = $55, K (Strike Price) = $60, t = 6 month, Long put, P0 = $6Problem 3. Draw the profit-loss diagram of the following positions on Apple Stock:Own stock at S0 (Spot price now) = $178 and buying the following put withK (Strike Price) = $165, t = 2 month, P = $5Problem 4. Draw the profit-loss diagram of the following positions on Apple Stock:Own stock at S0 (Spot price now) = $178 and buying the following put with K (Strike Price) = $185, t = 2 month, P = $14Problem 5. Draw the profit-loss diagram of the following positions on Apple Stock:Own stock at S0 (Spot price now) = $178, and selling the following call withK (Strike Price) = $200, t = 2 month, C = $3.50Problem 6. Draw the profit-loss diagram of the following positions on Apple Stock:Own stock at S0 (Spot price now) = $178, and selling the following call withK (Strike Price) = $170, t = 2 month, C = $16This study source was downloaded by 100000850782574 from CourseHero.com on 09-03-2022 16:44:57 GMT -05:00https://www.coursehero.com/file/95328471/Practice-Questions-on-Ch14-Optionsdocx/Powered by TCPDF


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