University of Kansas

Calculate the profit on the straddle if the spot price of the stock is 55 in one year. (Hint: The price of a put can be found using the Put Call Parity formula.)-9.40 -4.40 -2.40 0.60 2.00 You are given the following yield curve: Term (t) Spot Rate 1 0.060 2 0.065 3 0.069 4 0.072 Calculate the 1 year deferred 3 year forward rate f(1,4). ................
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