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ratelena [41]
4 years ago
15

The premium on a put option on the market index with an exercise price of 1050 is $9.30 when originally purchased. At expiration

of 2 months the position is closed, and the index spot price is 1072. What is the Put Payoff?
Business
1 answer:
lianna [129]4 years ago
5 0

Answer:

The put payoff = $1,072 - $1,050 = $22  per share

Explanation:

The put payoff is simply the difference between the spot price and the exercise price.

To determine the real profit obtained in this transaction we would need to know the investor's return rate. One of the basic pillars in finance it that $1 today is worth more than $1 tomorrow. We need a return rate to adjust the premium paid, for example if the return rate = 6%, then the premium would have been $9.30 x (1 + 6%/12)² = $9.30 x 1.005² = $9.39

profit = number of shares x (put payoff - adjusted premium)

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Consider a corporate bond with a $1000 face value, 8% coupon with semiannual coupon payments, 7 years until maturity, and a YTM
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Answer:

$961.42

Explanation:

firstly, we calculate the clean clean price below:

FV= 1,000

PMT= 40 (80 / 2)

I= 4.5 (9 / 2)

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Thus, PV= 948.89

Accrued Interest = coupon × (days since last payment/days in current coupon period)= 40 × (57 / 182) = 12.53

conclusively, dirty price = 948.89 + 12.53 = 961.42

3 0
4 years ago
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4 years ago
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iragen [17]

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7 0
3 years ago
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M1 is comprised of currency held outside banks + traveler’s checks + __________.
leva [86]
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When a company acquires a 20% - 50% interest in another company, this generally results in Group of answer choices a controlling
Softa [21]

Answer:

A significant level of influence.

Explanation:

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Hope this helps you out buddy.

Good luck and Thank You.

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