Quiz 2 Solved | Derivative Markets and Financial Institutions | FIN 462, Quizzes of Finance

Download Quiz 2 Solved | Derivative Markets and Financial Institutions | FIN 462 and more Quizzes Finance in PDF only on Docsity! A stock is selling for $18.50. The strike price on a call, maturing in 6 months, is $20. The possible stock prices at the end of 6 months are $22.50 and $15.00. Interest rates for 6 months are 6.0% (ie invest $1 today, in 6 months you will have 1.06). How much money would you borrow to create an arbitrage on a call trading for $2.00? $2.54 $4.85 $6.60 $8.85 A futures contract on the S&P should have a price greater than the stock price. True always True unless dividends are high relative to interest rates False, Always False, if the stock pays dividends Which of the following is most like a short position in a forward contract? buy stock, sell bond short stock, buy bond short stock, sell bond buy stock, buy bond A stock is selling for $32.70. The strike price on a call, maturing in 6 months, is $35. The possible stock prices at the end of 6 months are $39.50 and $28.40. If interest rates are 6.0% for six months, what is the option price? $1.90 $2.39 $3.40 $4.20 Compute the delta for the following put option. The stock is selling for $23.50. The strike price is $25. The possible stock prices at the end of 6 months are $27.75 and $21.75. a. -.423 b. -0.241 c. 0.52 *d. -0.54 -.423