If, for a $1000 premium, you buy a $100,000 put option on bond futures with a strike price of 110. At the same time, for a $1000 premium, you buy a $100,000 call option on bond futures with a strike price of 110. On the expiration date, the contract price is 106. Your total profit is $______ (negative if it is a loss).

i. Suppose at t = 0 you think that G - Sec 10-year maturity on - the run bond is under-priced, and you bet that its price will increase in the future. You don't have the bond in your hand, but you know there is a repo-market where you can take your position. Let the price of the bond is Rs. 97.85. Let the repo - dealer charges a hair - cut of Rs. 0.25. Say after time t = 10 days, the price of the bond becomes Rs. 98.25. Find the realized return of the bond. (Use n/360 notation). ii. What if the price reaches 98.25 after t = 180 days. Can you still make profit?

Suppose the quoted futures price for delivery in 1 year is $7.10. The current underlying price is $7 and the continuously compounded interest rate is 5%. The underlying does not pay dividends. How could you make a riskless arbitrage profit? Question 2Answer a. buy futures contracts, short sell the stock and invest in a bank account b. borrow from the bank to buy futures contracts and short sell the stock c. sell futures contracts, borrow and buy the stock d. sell future contacts, short sell the stock and invest in a bank account

The market price of a bond is $825.60, it has 15 years to maturity, a $1000 face value, and pays an annual coupon of $80.  What is the yield to maturity? Please do not use Excel. I need help inputting this in my TI-84 Plus CE calculator

Susan is looking into a convertible bond but does not know how to value this bond. The bond has a $1,000 face value and a conversion ratio of 36. What is the conversion price? If the stock price is $42, what is the conversion value?   What is the downside risk percentage of the bond if the current price is $1,250 and the investment premium is $861.53? Is this risk concerning?   The stock is currently selling for $42 per share. The issuer of the bond has announced a call; the call price is 108. What are your options here? What should you do?

A portfolio of derivatives on an asset is worth $10,000, the asset price is $ 250 and the risk - free interest rate is 4%. The theta and gamma of the portfolio is zero. What is the delta?

A non-dividend paying asset is current priced at $25 and the risk-free interest rate is 8% per annum. Today, you enter into a six-month futures contract to buy a unit of this asset. Three months from now the underlying price has fallen to $18 (but note that the interest rate has not moved). Which of the answers below is closest to the fall in the futures price? Use discrete discounting. Question 7Answer a. $6.50 b. $5.50 c. $7.50 d. $4.50

Today is January 1. The forward price for contracts maturing on April 1 is $104.4 and on October 1 is $111.6. On April 1, the price of a zero-coupon bond maturing on October 1 is $0.975. Assuming that the underlying interest rate is a continuously compounded interest rate and will not change, the amount of profit that you can make on October 1 by trading one contract each of the near and distant maturity forwards and other securities is: [round to two decimal places]

.....is the after tax cash flow generated by a business minus the cost of the capital it has deployed to generate that cash flow a. Net Present Value (NPV) a. Ob Economic value added (EVA) Oc. Internal Rate of Return (IRR) d. Discounted Cash Flow

D6) You use the Black Scholes model to price a Call option on a stock with discrete dividends. The dividends will be given in months 1, 5, and 9, each 3 USD. The current value of the stock is 105 USD, the strike price is 90 USD, the continuously compounded annual risk-free rate is 0.05, the volatility is 0.08, the time to maturity is 12 months. Calculate the price of the option.