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1) Suppose you enter into a short 6-month forward position at a forward price of $ 65. What is the payoff in 6 months for prices of $ 55, $ 60,$ 65,$ 70,$ 75 ? When price is $ 55, the payoff is $ When price is $ 60, the payoff is $ ? When price is $ 65, the payoff is $ When price is $ 70, the payoff is $ ? When price is $ 75, the payoff is $ 2) Suppose you buy a 6-month put option with a strike price of $ 65. What is the payoff in 6 months for prices of the underlying asset of $ 55, $ 60,$ 65,$ 70,$ 75 ? When price is $ 55, the payoff is $ When price is $ 60, the payoff is $ When price is $ 65, the payoff is $ When price is $ 70, the payoff is $ When price is $ 75, the payoff is $ ? 3) Comparing the payoffs of parts a) and b), which contract should be more expensive (i.e. the long forward, or the long call? Enter 1, or 2, respectively.)

1) Suppose you enter into a short 6-month forward position at a forward price of $ 65. What is the payoff in 6 months for prices of $ 55, $ 60,$ 65,$ 70,$ 75 ? When price is $ 55, the payoff is $ When price is $ 60, the payoff is $ ? When price is $ 65, the payoff is $ When price is $ 70, the payoff is $ ? When price is $ 75, the payoff is $ 2) Suppose you buy a 6-month put option with a strike price of $ 65. What is the payoff in 6 months for prices of the underlying asset of $ 55, $ 60,$ 65,$ 70,$ 75 ? When price is $ 55, the payoff is $ When price is $ 60, the payoff is $ When price is $ 65, the payoff is $ When price is $ 70, the payoff is $ When price is $ 75, the payoff is $ ? 3) Comparing the payoffs of parts a) and b), which contract should be more expensive (i.e. the long forward, or the long call? Enter 1, or 2, respectively.)

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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1) Suppose you enter into a short 6-month forward position at a forward price of $ 65. What is the payoff in 6 months for prices of $ 55, $ 60,$ 65,$ 70,$ 75 ? When price is $ 55, the payoff is $ When price is $ 60, the payoff is $ ? When price is $ 65, the payoff is $ ? When price is $ 70, the payoff is $ ? When price is $ 75, the payoff is $ 2) Suppose you buy a 6-month put option with a strike price of $ 65. What is the payoff in 6 months for prices of the underlying asset of $ 55, $ 60,$ 65,$ 70,$ 75 ? When price is $ 55, the payoff is $ When price is $ 60, the payoff is $ ? When price is $ 65, the payoff is $ ? When price is $ 70, the payoff is $ ? When price is $ 75, the payoff is $ 3) Comparing the payoffs of parts a) and b), which contract should be more expensive (i.e. the long forward, or the long call? Enter 1, or 2, respectively.) ?
Transcribed Image Text:1) Suppose you enter into a short 6-month forward position at a forward price of $ 65. What is the payoff in 6 months for prices of $ 55, $ 60,$ 65,$ 70,$ 75 ? When price is $ 55, the payoff is $ When price is $ 60, the payoff is $ ? When price is $ 65, the payoff is $ ? When price is $ 70, the payoff is $ ? When price is $ 75, the payoff is $ 2) Suppose you buy a 6-month put option with a strike price of $ 65. What is the payoff in 6 months for prices of the underlying asset of $ 55, $ 60,$ 65,$ 70,$ 75 ? When price is $ 55, the payoff is $ When price is $ 60, the payoff is $ ? When price is $ 65, the payoff is $ ? When price is $ 70, the payoff is $ ? When price is $ 75, the payoff is $ 3) Comparing the payoffs of parts a) and b), which contract should be more expensive (i.e. the long forward, or the long call? Enter 1, or 2, respectively.) ?
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