1. Barbara Jones needs to find the portfolio beta with 21% of invested funds in the first stock, 55% in the second stock, and 24% in the third stock. Assume that the stock betas are 1.168, 1.405, and 2.140, respectively.
2. You purchase 100 IBM July 120 call options (that is, you purchase one contract and the exercise price of options is $120) for a premium of $5 per option. You hold the options until the expiration date when IBM stock sells for $123 per share. Determine your net profit or loss.
3. You purchase 100 IBM July 125 call options for a premium of $5 per option. You hold the option until the expiration date when IBM stock sells for $123 per share. Determine your net profit or loss.