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Red Corporation has a 90-day call option for $100,000 at a strike price of P52.25. As of today, the selling spot rate is P52.30/dollar while the buying spot rate is P52.13/dollar. What| is the current position of Red Corporation with regard to its call option?
a.) in-the-money by 12,000
b.) in-the-money by 5,000
c.) out-the-money by12,000
d.) out-the-money by 5,000
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- 23. A firm has a payable of SFr 1,200,000.00. They hegdge this exposure with a call option with a strike price of $1.2917/SFr. The premium of the option is $0.1292. If at the time of payment the spot price ends up equal to $1.2529/SFr. What is the firm's total cost? (a) $1,658,520 (b) $1,705,080 (c) $1,503,480 (d) $1,348,440 (e) None of the above4. Consider a call option on the S&R index with 6 months to expiration and a strike price of $1000. Suppose that the effective rate compounded semiannually is 2% and the premium for this call is $93.81. (a) Draw the payoff and profit graphs for the call option holder. (b) If the S&R index price at expiration is $1100, will the owner exercise this option? What is the profit? (c) If the S&R index price at expiration is $900, will the owner exercise this option? What is the profit?1. WRE is currently trading at $120/share. You sold 8 PUT-option contracts on WRE with a strike price of $110 for $8 each. a. What will be your total $ and % gain/loss if WRE price is $130 at the expiration date? b. What will be your total $ and % gain/loss if WRE price is $115 at the expiration date? C. What will be your total $ and % gain/loss if WRE price is $100 at the expiration date?
- (please correct answer and Step by step solutions this question) Assume you have taken a long position in an Amazon 1,850 Strike Price Call option. The $1,850 Strike Price Call option premium = $25. Amazon is currently trading at $1,865, the short-term interest rate = 2% and there are 2 months until expiry. Two months later, at expiration, Amazon had rallied to $1,875. What is the profit or loss on your Amazon 1,850 Strike Price Call option?Assume you have taken a long position in an Amazon 1,850 Strike Price Call option. The $1,850 Strike Price Call option premium = $25. Amazon is currently trading at $1,865, the short-term interest rate = 2% and there are 2 months until expiry. Two months later, at expiration, Amazon had rallied to $1,875. What is the profit or loss on your Amazon 1,850 Strike Price Call option? (Please step by step solutions)A put currently has a strike price of $54 and a maturity of six months. what will be the profit/loss in each scenario to an investor who buys the put for $6.40? (a)$44 (b)$49 (c)$54 (d)$59 (e)$64
- A call option on MassComputer Corp. is trading with a strike price of $100 and an expiration date on November 18th at 4 pm in the afternoon. The premium paid on the call is $5.05. What is the net profit or loss from buying the call just prior to 4 pm on November 18 if at this time the stock price per share of MassComputer is: a. $105.56 Answer:The net profit is $ b. $95.68 Answer: The net profit is $ Place your answers in dollars and cents. Negative answers should use the minus sign. For example, the answer of minus two dollars and twenty cents would be placed as -2.20.Topic: Option Pricing When computing, please do not round off. Only final answers must be rounded off to two decimal places. 1. ABC Mining Inc. bought a option for P1,225. The option allows ABC to sell 10 tons of copper at a price of P30,200 per ton one month from now. If on the exercise date, a ton of copper sells for P29,600, how much is the net benefit obtained by ABC from the contract>Suppose a Japanese company, Matsushita, has to sell Can$ 50 m sometime during the next 6 months, and would like to lock in a minimum ¥ value. The price of a put option with a strike price of K = ¥ 230/$ is ¥ 4/$ What is the actual amount that they receive if the spot rate at the end of 3 months is 245/$?Since ST >K, the options are worthless and Matsushita can do better by selling at the market rate of ¥ 245/$, rather than the exercise price of ¥ 230/$. Thus, their total receipts will be CV234/$ C¥230 / $ C¥241/$ C¥4/$
- The margin requirement on the S&P 500 futures contract is 16%, and the stock index is currently 2,100. Each contract has a multiplier of $50 a. How much margin must be put up for each contract sold? Margin b. If the futures price falls by 1% to 2,079, what will happen to the margin account of an investor who holds one contract? (Input the amount as a positive value.) Margin account by c-1. What will be the investor's percentage return based on the amount put up as margin? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Percentage return ed ok at rices c-2. What would be the current cash balance in the margin account? Cash balanceSuppose a Japanese company, Matsushita, has to sell Can$ 50 m sometime during the next 6 months, and would like to lock in a minimum ¥ value. The price of a put option with a strike price of K = ¥ 230/$ is ¥ 4/$ What is the actual amount that they receive if the spot rate at the end of 3 months is ¥ 245/$?Since ST >K, the options are worthless and Matsushita can do better by selling at the market rate of ¥ 245/$, rather than the exercise price of ¥ 230/$. Thus, their total receipts will be O¥4/$ O¥ 234 / $ O¥241/$ O¥ 230 / $← A 8-month call option contract on 100 shares of Home Depot common stock with a strike price of $50.05 can be purchased for $512. Assuming that the market price of Home Depot stock rises to $65 11 per share by the expiration date of the option, what is the call holder's profit? What is the holding period return? The profit this option would generate over the 8-month holding period is $ (Round to the nearest cent.) Correc