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1) BOOK RATIO Jaster Jets has $10 billion in total assets. Its balance sheet illustrates $1 billion in present liabilities, $3 billion in long-term debt and $6 billion in common equity. It has 800 million shares of common stock outstanding, and its stock price is= $32 per share. Determine Jaster’s market /book ratio.

You may suppose (for simplicity) that both put and call option contracts for gold are for the quantity of one ounce of gold. Both put and call options have same maturity. Premium for call is $2/ounce and premium for put is $1/ounce. Both options have the strike price of= $1100/ounce.

2)i) The investor prepares (or sells) one put option contract. If price of gold in spot market at maturity date of option is $1095, compute her profit/loss?

a) A profit of $5.
b) A profit of $6.
c) A loss of $5.
d) A loss of $4.

3)ii) The investor purchases one call option contract. If price of gold in spot market at maturity date of the option is $1104, compute is her profit/loss?

a) A profit of $4.
b) A profit of $2.
c) A loss of $4.
d) A loss of $6.

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Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914254

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