mar350

pimpineasy Wrote:
-------------------------------------------------------
> CFASniper Wrote:
> --------------------------------------------------
> -----
> > I think this question is best solved by
> > elimination
> >
> > First off, you can rule out C because buying
> ATM
> > put (this is where knowing current LIBOR helps)
> is
> > going to be more expensive than buying a put at
> 3%
> > strike (OTM).
> >
> > So, the puts in A & B will cost you the same
> > amount as both have 3% strike.
> >
> > On the short call side, you will make more
> premium
> > by selling a call that is deeper in the money.
> > i.e. selling a call at strike 5% will fetch you
> > more than a call at 4.5% (given current LIBOR
> is
> > 4%)
> >
> > Therefore, my answer is
> >
> > B
>
>
>
> sniper hold on soldier which is more valuable to
> you a call @ 4.5% or a call @ 5%?
>
> i would think a call @ 4.5 no


But you are SHORT that call, Seargent!!!