Business, 11.10.2020 23:01 phowhim40

Today you are feeling bullish on UPP stock. You decide the best way to play that opinion is to purchase 5 call options that expire in 4 months with a strike price of 70.00. To lower your risk and your cost basis you simultaneously sell 3 call options that also expire in 4 months with a strike price of 77.50. The current stock price is 70.80. The price of the 70-strike call is 5.50 and the price of the 77.50 strike call is 2.40. The current continuously compounded risk free rate is 3% (annual). 3. a. Calculate your profit/loss if the ending price of one share of UPP stock is 80.00.
b. Calculate your profit/loss if the ending price of one share of UPP stock is 65.00.

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Today you are feeling bullish on UPP stock. You decide the best way to play that opinion is to purch...

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