Question 4: Use the following information for this problem Current price of Inde

Question

Question 4: Use the following information for this problem Current price of Index: 1000 Premium for Call: 80 P continuous annual (risk-free) rate: 4% Expiration date: ½ year T Time to cover call: ½ year from now % Create two tables and draw two labeled graphs of a a) Short on the index b) Long Call. To get full credit the tables must have at least 4 columns i) x, li)y, il) payoff, iv) cost, if any. The graphs must be sufficiently labeled so that someone from the outside walking in would be able to interpret them. leo (edt

Explanation / Answer

4) current price = 1000

Premium for call = 80

Payoff cost

short on the index 1020 80   

long call 1020 0

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.