2. Supposing that you are a speculator and have the following information on hand: Strike = $30 Call = $5 / option Put = $ 3 / option Available to speculate $200,000 Probable market values at maturity: 20, 25, 30, 35, 40, 45. The market is expected to be on the rise. Size of contract: one share Required: a) Show the net results for each market value. b) What would be the maximum loss obtainable? c) What is the equilibrium market value?

Hi, i need help with this question. The answer should be: potentially infinite but I dont understand how to get there. Please explain, thanks! Question: You establish a short strangle on a company using December call and put options. The call option has a strike price of $50 and the put option has a strike price of $45. The premium on the call option is $4.80 and the premium on the put option is $5.40. What is your maximum loss on this position?

$80. The call premium is $6 and the put premium is $8. To keep thìngs simple, you can assume each contract allows the holder to buy or sell 13) You buy one call contract and also buy one put contract, both with the strike price of one (rather than the typical 100) share of the underlying stock. a. Compute the payoff to your option position if the stock price is $92 when the options expire. b. Compute the profit you made if the stock price is $92 when the options еxpire. c. What would happen to the value of your position if the volatility of returns for the underlying stock increases a day after you bought the call and the put? Please explain your answer for full credit. E FC MacBook Pro I A !!!

Consider a two-state outcome for the following problem:                   Winterhold Publishing House       Current Stock Price $25.00        Exercise Price $27.00        Risk-free Rate 0.05       Share Price, High $30.00        Share Price, Low $20.00                  Required:         Using the data above, please find the hedge ratio. You currently own several shares of this company. The purchase puts according to the Hedge ratio to construct a non-random portfolio. Show the payoff for both outcomes, then solve for present value and the price of the put.