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Morgarella [4.7K]
3 years ago
11

Suppose a financial manager buys call options on 26,000 barrels of oil with an exercise price of $111 per barrel. She simultaneo

usly sells a put option on 26,000 barrels of oil with the same exercise price of $111 per barrel. What are her payoffs per barrel if oil prices are $106, $107, $111, $115, and $116?
Business
1 answer:
yanalaym [24]3 years ago
8 0

Answer:

Explanation:

Suppose a financial manager buys call options on 24,000 barrels of oil with an exercise price of $119 per barrel. She simultaneously sells a put option on 24,000 barrels of oil with the same exercise price of $119 per barrel. What are her payoffs per barrel if oil prices are $103, $108, $119, $130, and $135? (Leave no cells blank - be certain to enter "O" wherever required. A negative answer should be indicated by a minus sign.) 130 $ 135 Market price Payoffs per barrel 108 $ 119 103 $ $

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Answer:

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Explanation:

The coefficient of variation (CoV) is a measure of volatility of an investment. It tells the volatility in comparison with the expected return from the investment. We can say that the CoV tells us the risk per unit of return as CoV is calculated by dividing standard deviation, which is a measure of risk, by the expected return of the investment.

CoV = SD / r

Where,

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CoV = 0.107 / 0.064

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Answer:

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Answer:

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