fbpx
Get a unique, high-quality and non-plagiarized paper from us today at the most affordable price
Email us : premieredtutorials@gmail.com

Company has a $84 million portfolio with a beta of 1.2. The futures price for a contract on an index is 2100. Futures contracts on $250 times the index can be traded.

answer these questions, 1-5 are short answer questions, 6 and 7 are essay questions. please use excel for calculation if needed and also send ithe excel to me.
1.You short one December futures contract when the futures price is $2,020 per
unit (day 0). Each contract is on 100 units and the initial margin per contract that you
provide is $4,000. The maintenance margin per contract is $3,000. During the next day
(day 1) the futures price rises to $2,024 per unit. What is the balance of your margin
account at the end of the day (day 1)? In the following day (day 2), the futures price
decreases to $2,016 per unit. What is the balance of your margin account at the end of
day 2?
2. ) A company has a $84 million portfolio with a beta of 1.2. The futures price for
a contract on an index is 2100. Futures contracts on $250 times the index can be traded.
What trade is necessary to reduce beta to 0.9? What trade is necessary to increase beta
from 1.2 to 1.8?
3. On March 1 a commodity’s spot price is $40 and its August futures price is
$49. On July 1 the spot price is $64 and the August futures price is $63.50. A company
entered into futures contracts on March 1 to hedge its purchase of the commodity on July
1. It closed out its position on July 1. What is the effective price (after taking account of
hedging) paid by the company?
4. Given that the crude oil price is $95 per barrel. The annual storage cost is $5 per
barrel paid at the end of each year. The risk free rate is 5% per annum with continuous
compounding. You should assume that the crude oil is a consumption commodity and there
is no way to borrow the crude oil for a short sale. But, of course, you can borrow or lend
money at the risk free rate. Based on the price formula in our textbook, the no arbitrage
price range for a two-year futures contract on the crude oil in a rational market should be
5. A call option on a stock has a delta of 0.5. A trader has sold 1,000 options.
What position should the trader take to hedge the position? If the stock price increases in
the next day, should the trader _____ (buy or sell) some shares to continue to hedge.
6. Consider an American put option on a non-dividend-paying stock where the
stock price is $500, the strike price is $600, the risk-free rate is 1% per month, the volatility
is 36% per annum, and the time to maturity is six months.
a. Calculate the up step size u, down step size d, growth factor per step a, and risk-neutral
probability of up move p for a two-step tree.
b. Value the option using a two-step tree, more specifically, please show the price of this
stock at each of the following node: A, B, C, D, E, and F. Please also show the value of
this put option at each of the following node: D, E, F, B, C, and A.
c. If this is an American Call option, what is the value of the call option at each of the
following node: D, E, F, B, C, and A.
The two-step tree is shown in the following figure. (the figure is the upload picture)
7. Please use Black-Scholes formula for this question and keep your answers to the
4 digits.) ABC is a non-dividend-paying stock that has the potential to bankrupt or to be
taken over. Current stock price is $100/share; the risk-free interest rate is 12% per annum
with continuous compounding; the volatility is 20% per month; and the time to maturity is
2 years. Your manager wants you to construct a strap using the at-the-money European
options. How much is the cost of constructing this strap? More specifically,
a. What is the value of S0, K, r, σ, T, d1 and d2 in the Black-Scholes formula?
b. What are N(d1) and N(d2) in the Black-Scholes formula? What is the price of this European
call option? What is the price of this European put option?
c. Suppose ABC goes to bankrupt at maturity and the stock price at maturity is $0, what is
the percentage return to your strap?
d. Suppose ABC price goes to $300/share at maturity, what is the percentage return to your
strap?for all essay questions keep, please use excel and keep numbers to the 4 digits

Place your order now for a similar paper and have exceptional work written by our team of experts to guarantee you A Results

Why Choose US   

    6+ years experience on custom writing
    80% Return Client
    Urgent 2 Hrs Delivery
    Your Privacy Guaranteed
    Unlimited Free Revisions

 

Looking for a similar assignment. Place your order for a similar paper now and have excellent work written by our team of professionals to ensure you acquire the best grades.

If you find it difficult to balance your work and your studies because you are overwhelmed by other responsibilities, you have come to the right place . With the help of our dependable and simple-to-use essay and research writing service, students are able to focus on work or non-academic-related duties that they are required to carry out and complete all their school work on time .

We assist students who are struggling with their academic endeavors by allowing them to obtain essay assistance from  professional essay writers. We are never late for a deadline. When you ask our writer to write your paper, the assignment can be completed in as little as 12 hours or as long as 2 weeks. The order’s deadline is entirely up to you. 

Place an order of your assignment if you are in urgent need of assistance because your essay is due in a few hours/days or you do not know how to complete your professor’s academic assignment. We are here to assist you. You are guaranteed of high grades through our services. 

How to Place an Order 

When you want Premiered Tutorials to do your homework for you, you send the assignment details such as the instructions, due date/deadline, number of pages and college level to the customer support agent online on live chat,  fill in the assignment details at place an order or send the information to our email address premieredtutorials@gmail.com and a customer support agent will respond to you immediately. 

Premiered Tutorials has competent writers to handle any of your assignments. Once you place your order, we choose for you the best and competent writer for your assignment based on each writer’s competence in handling a subject. 

When the homework is completed, we have a quality assurance team that proofreads the assignment to ensure it meets the required rubric instructions from your professor.

After thorough review of your assignment, we send the paper to the client. In case you need any changes at this point, you can let us know so that we can handle it for you at no extra charge. 

Why Premiered Tutorials?

If you need professional online homework help at a cheap price from professional and thoroughly vetted online homework helpers, reach out to the best homework help website, Premiered Tutorials.

Whether you are in high school, undergraduate, masters or PhD level, we have the best academic writers to assist you with your homework. We thoroughly vet all our online homework helpers to ensure they are competent to handle our clients’ tasks. Some of the requirements we have is ensuring that they are English Native speakers, have all attended colleges and had high grades in their undergraduate, Masters and PhD classes and have worked as academic writers and delivered high results.

We are a reliable and best essay writing website in the market. Our assignment help services or rather what our clients ask us to do for them include take my online class for me, order an essay cheap, pay someone to write my essay, help with my assignments, history homework help, college homework help, essay writing help online, answers for your homework, pay someone to do my homework for me, homework answers math, pay someone to take my proctored exams and nursing homework assignment help online. As the best website for homework answers, our homework doers also offer cheap essay writing services, online assignment help for all classes

  • Law/ Criminal Law
  • Nursing
  • Information Technology
  • Psychology
  • Business
  • Statistics
  • Sociology
  • History
  • Communication
  • Culture and Society
  • Biology
  • Astronomy
  • Engineering

The courses indicated above are just but a small group of the types of classes Premiered Tutorials handles.

We have competent homework writers that can handle all academic disciplines regardless of the level of education of our clients.

  When we do your homework for you, we write it from scratch to ensure you receive a unique paper. It also ensures that every homework we do for you is free from plagiarism and will help the client to get the highest grades in his or her classes. Any client who manages to consistently use our homework help services is guaranteed of always having the best grades and being one of the top students in the class because we always deliver the best quality for any homework we do for you.

When we complete working on your homework, we deliver the paper to you on time as we are well aware that the work we handle, is time sensitive. Timely deliveries of assignments help our clients get the highest grades because missed deadlines on assignments can result to deductions of marks for late submissions. Therefore, you will always be assured of quality online homework help through Premiered Tutorials whenever you ask us to do your homework for you.

Homework Help Website

Why we should write your Paper 

  1. Money Return guarantee
  2. 0% Plagiarism Rate
  3. Guaranteed Privacy
  4. Written from scratch by highly qualified writers 
  5. Communication at Any Time (24/7)
  6. Flexible Pricing and Great Discount Programs
  7. Timely Deliveries
  8. Free Amendments

Statistics about Us

130 New Projects
235 Projects in Progress
315 Inquiries
420 Repeat clients

© 2021 Premiered Tutorials
All rights reserved. We provide online custom written papers, such as term papers, research papers, thesis papers, essays, dissertations and other custom writing services.

All papers inclusive of research material are strictly intended to be used for research and study purposes only. Premiered Tutorials does not support or condone plagiarism in any form. These custom papers should be used with proper reference.

Place an Order
error: Content is protected !!