A stock trades for shs. 120. A put on this stock has an exercise price of shs. 140 and is about to expire. The put trades for shs. 22. How would you respond to this set of prices? Explain
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A stock trades for shs. 120. A put on this stock has an exercise price of shs. 140 and is about to expire. The put trades for shs. 22. How would you respond to this set of prices? Explain
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- Under which of the following circumstances would you want to buy a stock? Select one: a. The HPR is greater than zero. b. A stock's holding period return is greater than the CAPM return c. A stock's CAPM return is greater than its holding period return d. The stock's price is higher than its valueA stock currently trades at $100. Consider a put and a call option written on this stock with strike price $105. Which of the following statements is most accurate? A.The call option is in-the-money and the put option is out-of-the-money B.The call option is out-of-the-money and the put option is in-the-money C.Both options are in-the-money D.Cannot determine without further informationAssume the stock’s future prices of stock A and stock B as the following distribution State Future Price Stock A Future price Stock B 1 $10 $7 2 $8 $9 If the time 1 price of stock A is $6, and the time 1 price of stock B is $5. And C1 represents the time 1 price of claim on state 1, C2 represents the time 1 price of claim on state 2 Use the information about stock prices and payoffs to Find the time 1 price C1 and C2. Find the risk–free rate of return, obtained in this market.
- A call option on a stock trading at $58 has an exercise price of $47. The call option is _____ Check all that apply A. in the money B. out of the money C. at the moneyAssume the stock's future prices of stock A and stock B as following distribution State Future Price Stock A Future price Stock B $10 $7 $8 $9 If the time 1 price of stock A is $6, and the time 1 price of stock B is $5. And C and C2 represents the time 1 price of ciaim on state 1, C, represents the time 1 prices of unit claims on states 1 and 2. Use the information about stock prices and payoffs to • Find the time 1 prices C, and C2. • Find the risk - free rate of return, obtained in this marketOf the following four call options that can be purchased on a stock, which would you expect to have the lowest price? A. September call; $85 exercise price B. September call; $80 exercise price C. December call; $85 exercise price D. December call; $80 exercise price
- An investor purchases a stock for $38 and a put for $.50 with a strike price of $35. The investor sells a call for $.50 with a strike price of $40. What is the maximum profit and loss for this position? Draw the profit and loss diagram for this strategy as a function of the stock price at expiration.You are given the following information concerning the trades made on a particular stock. Calculate the money flow for the stock based on these trades. Note: Leave no cells blank - be certain to enter "0" wherever required. A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole number. Price $ 70.02 70.05 70.03 70.02 69.03 70.37 70.28 Price $ 70.02 70.05 70.03 70.02 69.03 70.37 70.28 Volume 2,900 2,400 2,800 2,950 3,700 4,000 Up or Down 333333 +✓ $ ✓ +✔ > Answer is complete but not entirely correct. Negative Money Flow Price Times Volume 203,145✔ $ 168,072✔ 196,056 ✔ 203,639✔ 260,369✔ 281,120 Positive Money Flow 203,145 $ 0✔ 0✔ 0✔ 463,514✔ 0♥ 0✔ 168,072✔ 364, 128✔ 567,767 ✔ 0✔ 848,887 ✔ Money flow at the end of the day $ Net Money Flow -567,767 XIf an investor places a _________ order, the stock will be sold if its price falls to the stipulated level. If an investor places a __________ order, the stock will be bought if its price rises above the stipulated level. Group of answer choices stop-loss; stop-buy market; limit stop-buy; stop-loss limit; market
- A trader buys a call option on a share for K2. The stock price is K25 and the strike price is K20. State the circumstances under which the trader will make a profit. State the circumstances under which the option will be exercised. Draw a diagram in support of your answers above, showing the variation of the trader’s profit with the stock price at the maturity of the option.Astromet is financed entirely by common stock and has a beta of 1.20. The firm pays no taxes. The stock has a price-earnings multiple of 11.0 and is priced to offer a 10.9% expected return. The company decides to repurchase half the common stock and substitute an equal value of debt. Assume that the debt yields a risk-free 4.6%. Calculate the following: Required: a. The beta of the common stock after the refinancing b. The required return and risk premium on the common stock before the refinancing c. The required return and risk premium on the common stock after the refinancing d. The required return on the debt e. The required return on the company (i.e, stock and debt combined) after the refinancing If EBIT remains constant: f. What is the percentage increase in earnings per share after the refinancing? g-1. What is the new price-earnings multiple? g-2. Has anything happened to the stock price? Complete this question by entering your answers in the tabs below. Reg A to E Reg F to G2…Consider the three stocks in the following table. Pt represents price at time t, and ot represents shares outstanding at time t. Stock C splits two for one in the last period. Stock Po P1 21 75 65 75 75 75 55 150 50 150 50 150 110 150 115 150 60 300 A B с с 20 75 P2 a. Rate of return b. Rate of return Required: Calculate the first-period rates of return on the following indexes of the three stocks (t=0 to t= 1): Note: Do not round intermediate calculations. Round your answers to 2 decimal places. a. A market-value-weighted index. b. An equally weighted index. 22 % %