1- The common stock of Sophia Enterprises serves as the underlying asset for the following derivative securities: (1) forward contracts, (2) European-style call options, and (3) European- style put...


1- The common stock of Sophia Enterprises serves as the underlying asset for the following


derivative securities: (1) forward contracts, (2) European-style call options, and (3) European-
style put options.


a. Assuming that all Sophia derivatives expire at the same date in the future, complete a
table similar to the following for each of the following contract positions:
(1) A long position in a forward with a contract price of $50.













































































Expiration Date
Sophia Stock Price
Expiration Date
Derivative Payoff
Initial
Derivative Premium
Net Profit
25
30
35
40
45
50
55
60
65
70
75


2- Refer once again to the derivative securities using Sophia common stock as an underlying
asset discussed in Problem 1.
a. Assuming that all Sophia derivatives expire at the same date in the future, complete a
table similar to the following for each of the following contract positions:
(1) A short position in a forward with a contract price of $50














































































Expiration Date
Sophia Stock Price
Expiration Date
Derivative Payoff
Initial
Derivative Premium
Net Profit
25
30
35
40
45
50
55
60
65
70
75


Jun 10, 2022
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