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AysviL [449]
2 years ago
3

Suppose an investor buys a call option on 45,000 barrels of oil with an exercise price of $51 per barrel and simultaneously sell

s a put option on 45,000 barrels of oil with the same exercise price of $51 per barrel. Her net payoff per barrel on these option contracts is _____ if the market price per barrel is $49 and _____ if the price per barrel is $55.
Business
1 answer:
Lunna [17]2 years ago
6 0

Answer:

The correct answer is $2 and $4.

Explanation:

According to the scenario, the computation for the given data are as follows:

If market price = $49 per barrel

Here, call option can not be used as exercise price is more than the market price.

So, payoff per barrel on put option = $51 - $49

= $2

If market price = $55

Here, Put option can not be used as exercise price is less than the market price.

So, payoff per barrel on Call option = $55 - $51

= $4

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A nursery has $50,000 of inventory in dogwood trees and red maple trees. the profit on a dogwood tree is 28% and the profit on a
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Answer and Explanation:

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