1 suppose you own 512 shares of stock and want to hedge by, Ask an Expert

Finance

1. Suppose you own 512 shares of stock and want to hedge by writing call options. A call option is available on the stock and has a delta of 0.2. How many options are needed to create the hedge? Enter your answer as a positive number rounded to the nearest integer.

2. Suppose you own 515 shares of stock and want to hedge by purchasing put options. A put option is available on the stock and has a delta of -0.4. How many options are needed to create the hedge? Enter your answer rounded to the nearest integer.

3. Suppose you own 116 shares of stock currently selling for $26 per share and want to hedge by writing call options. A call option is available today on the stock and has a premium of $2 and a delta of 0.7.

At the termination of the hedge, the stock is worth $30, and the call is worth $6.

Calculate the total hedge profit.

Enter your answer rounded to the nearest integer.

4. Suppose you own 681 shares of stock currently selling for $38 per share and want to hedge by purchasing put options. A put option is available today on the stock and has a premium of $7 and a delta of -0.6.
At the termination of the hedge, the stock is worth $29, and the put is worth $12.

Calculate the total hedge profit.

Enter your answer rounded to the nearest integer.

View complete question

Financial Management, Finance

Category:- Financial Management
Reference No.:- M92747600

Have any Question?Write your Review or question?

Related Questions in Financial Management

Assignmentp6-8nbsprisk-free rate and risk

Assignment P6-8 Risk-free rate and risk premiums The real rate of interest is currently 3%; the inflation expectation and risk premiums for a number of securities follow. Inflation expectation Security Premium Risk pr ...

Question -discuss the role of a central bank in a country

Question - Discuss the role of a central bank in a country, particularly in implementing monetary policy. Comment on any regulatory requirements imposed on the central bank in performing their responsibilities. Comment o ...

Use the internet to locate information regarding a

Use the Internet to locate information regarding a negotiation from the past 6 months that you would consider to be integrative in nature. Examine the differences between distributive and integrative negotiation. Determi ...

Assignment all assignments should be written in your own

Assignment All assignments should be written in your own words and provide examples and opinions beyond the textbook or any other source you get them from. I will be looking for more of your opinions and examples beyond ...

Assignmentyou may need to make assumptions for some of the

Assignment You may need to make assumptions for some of the problems. You will not lose points as long as you state these assumptions, and your constraints are logical -according to your assumptions. YOUR MODELS MUST BE ...

Watch the video moral imaginationand answer the following

Watch the video: "Moral Imagination" And Answer the following questions: 1. Can you think of a time when you or someone whom you know used moral imagination? If so, what motivated you (or this individual) to use moral im ...

Please put the answers below each questionschapter 132

Please put the answers below each questions Chapter 13 2. Under what circumstances might the Fed's maximum employment goal conflict with its price stability goal? 3. How does monetary policy affect aggregate demand throu ...

Assignmentq1 a restaurant records the number of customers

Assignment Q1. A restaurant records the number of customers it receives for 15 days. The data is shown in the following . 140, 141, 171, 178, 187, 140, 238, 247, 254, 297, 205, 211, 206, 286, 187 a. Calculate the Q2, D6, ...

Assume that hos could issue a zero coupon bond at an annual

Assume that HOS could issue a zero coupon bond at an annual interest rate of 4 percent with semiannua compounding for 20 years. If HOS receives $2,264.45 for the bond, how much would it have to pay at the maturity date?

Test1 if a persons required return decreases for an

TEST 1) If a person's required return decreases for an increase in risk, that person is said to be risk-seeking. risk-indifferent. risk-adverse. risk-aware. 2) Last year Mike bought 100 shares of Dallas Corp. common stoc ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Financial Management Expert