1. You short one ABC September 90 put contract for a premium of $2.19. The option is held until the expiration date, when ABC stock sells for $85.23 per share.

What is your total profit on this investment?

2. Consider the following hypothesis test:

H0: ≤ 25

Ha: > 25

A sample of 40 provided a sample mean of 26.4. The population standard deviation is 5.

a. Compute the value of the test statistic (to 2 decimals).

b. What is the p-value (to 4 decimals)?

c. At  = .01, what is your conclusion?

p-value is 1) greater than or equal to 0.01, reject 2)greater than 0.01, do not reject 3)less than or equal to 0.01, do not reject 4)less than 0.01, reject 5)equal to 0.01, do not reject 6)not equal to 0.01, do not reject

d. What is the rejection rule using the critical value?

Reject H0 if z is 1) greater than or equal to 2.33 2)greater than 2.33 3)less than or equal to 2.33 4)less than 2.33 5)equal to 2.33 6)not equal to 2.33

What is your conclusion?