Q3. Suppose you write 30 put option contracts with a strike of $100 and expiring in 3 months. The put options are trading at $4.80. What is your net gain/loss if the underlying stock price at maturity is $110? What is the break-even price when your profit from this investment is zero?

Q4. A strangle is created by buying a put option, and buying a call on the same stock with higher strike price and same expiration. A put with an exercise price of $100 sells for $6.95 and a call with a strike of $110 sells for $8.60. Draw a graph showing payoff and profit for a strangle using these options.

Consider the following​ bonds:

What is the percentage change in the price of each bond if its yield to maturity falls from

6.1 % to 5.1%​?

like,

a.The price of bond A at 6.1 % YTM per $100 face value is $?

b.The price of bond A at 5.1% YTM per $100 face value is ​$?

c. The percentage change in the price of bond A is $?

same with Bond B, C, D, What is the percentage change in the price of each bond if its yield to maturity falls from

6.1% to 5.1%​?

thank you.

Article- Disney Takes A Gamble On Price Elasticity With Mulan

In Unit 7, we talked about firms’ ability to set price depending on the price elasticity of demand, which in turn can be influenced by a number of factors such as availability of substitutes, consumers’ tastes and preferences, and so on.

You might have heard about Disney’s recent release of Mulan on its streaming platform Disney+.

Post 1. What are the justifications for Disney to set the price for streaming of the movie at $30 on top of the Disney+ subscription fee $7? Explain in 50-100 words.

Post 2. Do you think the price elasticity of demand for Mulan is elastic or inelastic? Discuss in 100-150 word

You want to liquidate your position now. The current future price is $101. Now there are six securities in the market.

1. A corporate bond with 10% annual coupon rate, and the market price $100 (for $100 face value).
2. A 16 year Treasury bond with 5.4% coupon rate (paid semiannually), and the market price is $91.740.
3. A 12 year Treasury bond with 10% coupon rate (paid semiannually), and the market price is $233.127.
4. A 20 year Treasury strips, and the market price is $23.479.
5. A 20 year Treasury bond with 6% coupon rate (paid semiannually), and the market price is $110.677.
6. A 5 year Treasury bond with 6% coupon rate (paid semiannually), and the market price is $103.523.

What is your return/loss (assume 0 accrued interest)?

If the initial exchange rate is $1.20 cad for $1.00US. After 10 years, the United States price level has risen from 100 to 200, and the Canadian price level has risen from 100 to 175.

What was the inflation rate in each country?

What nominal exchange rate would preserve the initial real exchange rate?

Which country’s currency depreciated?

The country of Rainbows exports seeds to the country of Farmington. Information for the quantity demanded (Qd) and the quantity supplied (Qs) for each country, in a world without trade, are given in the tables below.

Rainbows:

Farmington:

What is the equilibrium price and quantity for each country?

Question 1 options:

Question 2

In Chile, one worker can harvest 4 pounds of peppers or 4 pounds of coffee beans. In Argentina, one worker can harvest 2 pounds of peppers or 8 pounds of coffee beans.

a) Which country has the comparative advantage harvesting peppers?  

b) Which country has the comparative advantage in harvesting coffee beans?

Question 2 options:

Question 3 (1 point)

Saved

The country of Rainbows exports seeds to the country of Farmington. Information for the quantity demanded (Qd) and the quantity supplied (Qs) for each country, in a world without trade, are given in the tables below.

Rainbows:

Farmington:

What is the equilibrium price and quantity if trade is allowed to occur?

Question 4

In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios.

What is the opportunity cost for Japan and Malaysia for producing 80 additional radios?

Question 4 options:

5. Two years ago, you bought 1,000 units of a new mutual fund at a price of $10 each. To start, the fund raised a total of $100 million; it has an MER of 2.5%. In the first year, the fund manager made $12 million in gross investment income for the fund. At the start of year 2, investors bought another 1 million units and the current NAV. During the second year, the portfolio manager made a total of $14 million in gross investing profits. How much can you sell your units for (approximately) at the end of year 2? (Make sure to show your calculations and explain them so that the reader understands them).

a) Calculate the price, duration and convexity (all based on continuous discounting) of a two-year 14% coupon bond (paid semi-annually) with a face value of $100. Suppose that the yield on the bond is 12% per annum with continuous compounding

b) What would be the estimated change in the value of the bond for a small decrease of 10 basis points in interest rates (using first order derivation only)?

c) What would be the estimated change in value for a larger increase of 200 basis points in interest rates (using second order derivation as well)?

d) The effect of what type of change in interest rates on bond value can be estimated using these methods?

Suppose XYZ stock costs $100/share today and is expected to pay $1.25/share quarterly dividend with the first coming 3 months from today and the last just prior to the end of the year (from today). Price a one-year forward contract on the XYZ stock if you know that the annual continuously compounded risk-free rate is 10%. If the one –year forward contract on XYZ stock is listed at $108, do you see any arbitrage profit opportunity in this case? If yes, what strategy you will apply to reap that profit? Please explain your answer by detailing the cash flows today and at expiration to realize the arbitrage profit.