The two calls you are to value are:
1. The August 2014 $50 Whole Foods call option ($50 is the strike price)
2. The Jan 2015 $50 Whole Foods call option ($50 is the strike price)
Use a standard deviation of 20 and a risk free rate of 2%.
1. Copy and paste your quantitative results into a word document and explain your results. If there is a difference between the results that your two models arrive at, please discuss why you think this happened. You MUST provide a properly referenced citation for where you obtained your model in the form of a footnote to your answer to this question.
2. Compare the Aug 2014 call Greeks and the Jan 2015 call Greeks and explain why there are differences for EACH Greek (include Delta, Gamma, Theta, Vega & Rho). No credit will be given if you just provide the definitions of the Greeks & I would prefer if you omitted basic definitions and references to the puts; you must apply the definitions to the situation and be specific.
3. Go to Yahoo! Finance and look up the actual market prices (premiums) for these two calls (please indicate the date and time of the quotes in your answer). Explain why you believe the calculated price may not be the same as the actual market price.
4. Based upon your research, take a position in Whole Foods– either bullish or bearish and explain how you would act on your opinion in the market, using what you have learned in this class – what would you buy or sell and why; what might your potential profit and loss be (specific numbers are required); why is your choice the best choice for capitalizing on your opinion. You can use actual share transactions and/or naked or covered derivatives of any month or strike; you are not limited to the calls that you are analyzing in this assignment. The assumption is that you have no existing positions in Whole Foods stock or Whole Foods derivatives. Doing nothing is not an acceptable answer.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more