5. (3’) You buy one Huge-Packing August 50 call contract and one Huge-Packing August 50 put contract. The call premium is $1.35, and the put premium is $4.60. What is your highest potential loss from this position? Note: There are 100 shares for one contract.
Read Details7. (10’) The stock of Business Adventurers sells for $30 a share. It likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows. Dividend Stock Price Boom $2.00 $40 Normal Growth 1.30 32 Recession 0.70 23 a. Calculate the expected holding-period return and standard deviation of the holding period return. All three scenarios are equally likely. b. Calculate the expected return and standard deviation a portfolio invested 70% in Business Adventures and 30% in Treasury bills. The return on bills is 4%.
Read Details6. (6’) You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $68 per share. You want to establish a bullish money spread to help limit the cost of your option position. You find the following option quotes: Wildwood Corp Underlying Stock price: $68.00 Expiration Strike Call Put June 63.00 10.30 2.90 June 68.00 5.40 4.80 June 73.00 2.90 9.30 1) To establish a bull money spread with puts, you would _______________. A. buy the 73 put and sell the 63 put B. buy the 63 put and sell the 73 put C. buy the 63 put and buy the 73 put D. sell the 63 put and sell the 73 put 2) If you establish a bullish money spread with the puts as above. In June the stock’s price turns out to be $70. Ignoring commissions, what would your net profit on the bull money spread be? Note: There are 100 shares for one contract.
Read DetailsUse the scrollbar to scroll down inside the area below >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> TEST 2 INTRO REMEMBER: Throughout the exam, make sure your camera captures a side view of your proctoring environment showing Both hands, Your exam papers, Your face profile, Your computer screen (Honorlock also captures the screen separately), keyboard, and mouse, Your cell phone, muted and positioned face down. IMPORTANT: Keep an eye on the camera view popup window Near the bottom right corner of your Canvas window, you should see a popup window showing your camera view. Make sure to leave that window visible throughout your proctoring session. Do NOT minimize it (if you inadvertently do so, then you can restore it by clicking on “Webcam” on the Honorlock toolbar located at the bottom of the testing window) or obscure it, and continue to ensure that your camera view properly shows all the required items (both hands, exam papers, your face profile, etc.). While some violations may be flagged immediately (e.g., your face not being visible), the system will NOT alert you to most types of violations during the session – instead, those will be flagged during the review of the session’s recording conducted by the proctor and/or the professor. IMPORTANT: Keep an eye on the Canvas timer 2 hours and 15 minutes are allocated for this exam on Canvas, but you must finish writing within 2 hours, with the remaining 15 minutes used for scanning and submitting your work. On the right side of the Canvas window, there is a timer showing “Time Running”. Do NOT hide that timer. Before the timer reaches 15 minutes, you must click on “FINISH UP”, and then the “Next” button below. There will be no separate alert from the system during the session – if you finish up late, then your session will be flagged when the session’s recording is reviewed. TEST 2
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