Here is an assignment to be solved. I will really appreciate if anybody can do it!
Show all your work
- An increase in which of the following would increase the price of a call option on common stock, ceteris paribus?
- Stock Price
- Stock Price Volatility
- Interest Rates
- Exercise Price
- II only
- II and IV only
- I, II and III only
- I, III and IV only
- I, II, III and IV
- Which of the following is true?
- Forward contracts have no default risk
- Future contracts require an initial margin requirement to be paid
- Forward contracts are marked to market daily
- Forward contract buyers and sellers do not know who the counterparty is
- Future contracts are only traded over the counter
- You have agreed to deliver the underlying commodity in 90 days. Today the underlying commodity price rises and you get a margin call. You must have:
- A long position in a future contract
- A short position in a future contract
- Sold a forward contract
- Purchased a forward contract
- Purchased a call option on a future contract
- You find the following current quote for the June T-Bond contract: $100,000; Pts 32nd, of 100%.
Open High Low Settle Open Interest
89-16 89-16 88-22 88-28 45,348
You went long in the contract at the open. Which of the following is/are true?
- By the end of the day your margin account would be increased
- 45,348 contracts were traded that day
- You agreed to deliver in June $100,000 face value T-Bonds in exchange for $88,875.
- You agreed to purchase in June, $100,000 face value T-Bonds in exchange for $89,500.
- I, II and III only
- I, II and IV only
- I and III only
- I and IV only
- IV only
- A speculator may write a call option on stock with an exercise price of $15 and earn a $3 premium if they though:
- The stock price would stay at or above $15
- The stock volatility would increase
- The stock price would rise above $18
- The stock price would stay at or below $18
- Both A and B could be true
- The higher the exercise price, the________the value of a put and the_______the value of a call.
- Higher; higher
- Lower; lower
- Higher; lower
- Lower; higher
- A stock has a spot price of $35. Its May options are about to expire. One of its puts is worth $5 and one of its calls is worth $5. The exercise price of the put must be________and the exercise price of the call must be__________.
- 30; 40
- 35; 35
- 40; 30
- 25; 45
- One can't tell from the information given
- Suppose a stock is priced at $50. You are bullish on the stock and re considering March calls with an exercise price of $45 and $55 respectively. The 45 call is priced at $8.50 and the 55 call is quoted at $2.75. What should you consider in deciding which to purchase if you do not plan on exercising prior to maturity? Be specific.
So, there are 8 questions waiting to be answered, if someone can do it of cause.
Sorry, I did not number the questions because I can not get it.
Using the BB Code to number them, whenever I wanna continue numbering, it restarts automatically with 1?!
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