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Assume that you instead have shorted a call on the Intuit stock at a strike price of 36. The option will expire in exactly three months’ time.

Problem 1

If the stock is trading at 46 in three months, how much will you owe? State you answer rounded off to two decimal points.

Problem 2

If the stock is trading at 32 in three months, how much will you owe? State you answer rounded off to two decimal points.

Problem 3

Dynamic Energy Systems stock is currently trading for 32 per share. The stock pays no dividends. A one-year European put option on Dynamic with a strike price of 41 is currently trading for 9.18. If the risk-free rate of interest is 10% per year, what is the price of a one-year European call option on Dynamic with a strike price of 41? State you answer rounded to two decimal points.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92714763

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