ou believe that oll prices will be rising more than expected, and that rising prices will result in lower earnings for industrial companies that use a lot petroleum-related products in their operations. You also believe that the effects on this sector will be magnified because consumer demand will fall ou locate an exchange traded fund, QLT, that represents a basket of industrial companies. You don't want to short the ETF because you don't have our account. QLT is currently trading at $32.49. You decide to buy a put option (for 100 shares) with a strike price of $34.05, priced at $2.22. It turni correct. At expiration, QLT is trading at $30.20. Calculate your profit. (Click on the icon here in order to copy the contents of the data table below spreadsheet) QLT: Materials-532.49 Calls Strike Expiration $30.20 November $34.05 November $1.22 Price $1.22 he profit of the trade before trading costs is $ (Round to the nearest cent.) Strike $30.20 $34.05 Puts Expiration Price November $2.63 November $2.22
ou believe that oll prices will be rising more than expected, and that rising prices will result in lower earnings for industrial companies that use a lot petroleum-related products in their operations. You also believe that the effects on this sector will be magnified because consumer demand will fall ou locate an exchange traded fund, QLT, that represents a basket of industrial companies. You don't want to short the ETF because you don't have our account. QLT is currently trading at $32.49. You decide to buy a put option (for 100 shares) with a strike price of $34.05, priced at $2.22. It turni correct. At expiration, QLT is trading at $30.20. Calculate your profit. (Click on the icon here in order to copy the contents of the data table below spreadsheet) QLT: Materials-532.49 Calls Strike Expiration $30.20 November $34.05 November $1.22 Price $1.22 he profit of the trade before trading costs is $ (Round to the nearest cent.) Strike $30.20 $34.05 Puts Expiration Price November $2.63 November $2.22
Chapter9: Forecasting Exchange Rates
Section: Chapter Questions
Problem 6ST
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Question
Transcribed Image Text:You believe that all prices will be rising more than expected, and that rising prices will result in lower earnings for industrial companies that use a lot
of petroleum-related products in their operations. You also believe that the effects on this sector will be magnified because consumer demand will fall as oil prices rise.
You locate an exchange traded fund, QLT, that represents a basket of industrial companies. You don't want to short the ETF because you don't have enough margin in
your account. QLT is currently trading at $32.49. You decide to buy a put option (for 100 shares) with a strike price of $34.05, priced at $2.22. It turns out that you are
correct. At expiration, QLT is trading at $30.20. Calculate your profit. (Click on the icon here in order to copy the contents of the data table below into
a spreadsheet.)
Calls
Strike Expiration
$30.20 November
$34.05 November
QLT: Materials-$32.49
Price
$1.22
$1.22
come
The profit of the trade before trading costs is $. (Round to the nearest cent.)
Puts
Expiration Price
Strike
$30.20 November $2.63
$34.05 November $2.22
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