Question

. Which one of the following choices is the same synthetic position as long stock, long...

. Which one of the following choices is the same synthetic position as long stock, long put? M a. Short put M b. Long call M c. Short call M d. Long pu

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Correct answer is D

--------------------------------------------------------------------------------------------------------------------------

Synthetic position is an option strategy in which investor the long stock, long call and long put at same strike price.

--------------------------------------------------------------------------------------------------------------------------

Feel free to comment if you need further assistance J

Pls rate this answer if you found it useful.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which one of the following choices is a synthetic short call? M a. Short stock, short...
Which one of the following choices is a synthetic short call? M a. Short stock, short put M b. Long stock, short call M c. Short stock, long put M d. Long stock, long put M e. Short stock, long call
10.Unlike a covered call writer, a naked call writer will always lose if a.         the stock...
10.Unlike a covered call writer, a naked call writer will always lose if a.         the stock price rises by more than the option premium b.         the stock price declines by more than the option premium c.         a closing transaction is executed d.         none of the above 16.Which of the following is equivalent to a synthetic call? a.         a long stock and a short put position b.         a long put and a long stock position c.         a long put and a...
Which of the following is the riskiest single-option position? (a) long the call. (b) long the...
Which of the following is the riskiest single-option position? (a) long the call. (b) long the put. (c) short the call. (d) short the put. (v) An investor will make a net profit from a call option when the price of the stock is: (a) above the strike price. (b) below the strike price plus the premium. (c) above the strike price plus the premium. (d) at the strike.
Consider a put option and a call option with the same strike price and time to...
Consider a put option and a call option with the same strike price and time to maturity. Which of the following is true? (5 points) It is possible for both options to be in the money. It is possible for both options to be out of the money. One of the options must be in the money. One of the options must be either in the money or at the money. When the stock price increases with all else remaining...
If you combine a long stock position with buying an at the money put option the...
If you combine a long stock position with buying an at the money put option the resulting net payoff profile will resemble the payoff profile of a _______. long call short call short put long put
Consider a portfolio consisting of a long position in one stock and a short position in...
Consider a portfolio consisting of a long position in one stock and a short position in two call options. Both the current stock price (S0) and the exercise price (K) of call options are $20. The call option costs $3. a) Construct a table showing the payoffs and net profits for all possible price ranges. b) Draw a diagram showing the variation of an investor’s net profit with the terminal stock price c) For what price range does this portfolio...
Consider a portfolio consisting of a long position in one stock and a short position in...
Consider a portfolio consisting of a long position in one stock and a short position in two call options. Both the current stock price (S0) and the exercise price (K) of call options are $20. The call option costs $3. a) Construct a table showing the payoffs and net profits for all possible price ranges. b) Draw a diagram showing the variation of an investor’s net profit with the terminal stock price c) For what price range does this portfolio...
Consider a portfolio consisting of a long position in one stock and a short position in...
Consider a portfolio consisting of a long position in one stock and a short position in two call options. Both the current stock price (S0) and the exercise price (K) of call options are $20. The call option costs $3. a) Construct a table showing the payoffs and net profits for all possible price ranges. b) Draw a diagram showing the variation of an investor’s net profit with the terminal stock price c) For what price range does this portfolio...
Consider a portfolio consisting of a long position in one stock and a short position in...
Consider a portfolio consisting of a long position in one stock and a short position in two call options. Both the current stock price (S0) and the exercise price (K) of call options are $20. The call option costs $3. a) Construct a table showing the payoffs and net profits for all possible price ranges. b) Draw a diagram showing the variation of an investor’s net profit with the terminal stock price c) For what price range does this portfolio...
A synthetic short sale is created with a long put and a short call with the...
A synthetic short sale is created with a long put and a short call with the same strike price and expiration dates. Bank of America stock is currently trading at $21.71 per share. A May $25 call is trading at $2.75 and a May $25 put is currently trading at $2.25. Evaluate the payoffs of a short sale of BOA and the synthetic short sale at prices of $18, $25 and $28. Don’t forget the premiums on the options in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT