www.business.unsw.edu.au Australian School of Business School of Banking & Finance FINS3635 OPTIONS‚ FUTURES AND RISK MANAGEMENT TECHNIQUES Session 2‚ 2013 Assignment Due 9 am on October 23‚ 2013 This is a group assignment to be undertaken by no more than 7 students. Group members can be formed from different tutorial classes. You may use Excel for this assignment. Submission: You must upload your assignment on UNSW Blackboard before 9am on 23/10/2013 and hand in a printed copy in the
Premium Options Option Derivatives
provide the relevant calculations. Assignment is individual. Assignments should be lodged at the next lecture (if you intend not to attend the lecture but would like to submit assignment‚ contact topic coordinator). Emailing assignment is not an option as one needs to get a permission in advance to do so. If you have been granted the permission then the assignment needs to be submitted before the start of the lecture‚ i.e. before 1pm. In case the assignment is submitted after 1pm‚ it will not be
Premium Derivative Strike price Call option
Paramount 1994 1.) On December 14‚ Paramount’s board dropped the merger agreement with Viacom and agreed to hold an auction for control of Paramount. The implication of this move was that although Paramount would endorse one of the two bids‚ the shareholders’ tender decisions ultimately would decide the winner. 2) 3.) (Refer Chart “Stock Price Movements” in appendix.) Before the announcement‚ (on September 7)‚ Paramount stock traded at $55.875 per share. From that point‚ Paramount stock reached
Premium Stock Stock market Call option
has turned sour as BP’s stock price dipped dramatically. Upon analysing this fund-raising issuance along with the current market environment‚ we have concluded that this offering is not as valuable despite the addition of the repurchase plan (put option) after the first payment. We will be discussing our methodology on how we came up with our conclusion and we will also give several recommendations when this issuance will be worth investing in. Methodology The team decided to value the stock
Premium Option Strike price Call option
Derivative investment course work Topic: Discuss and investigate VaR and its characteristics when applied to options. You must produce example calculations on: European and American style options Long and short positions in these Portfolio of at least three different options (more is better) Introduction All financial institutions bear some sort of risk while dealing with different financial instruments‚ whether it be corporate treasurers‚ fund managers or financial institutions‚ they are
Premium Call option Put option Option
Part I: Do the following Questions 1. Define American Call/Put option 10 pts Answer Options allow investors to hedge against risk. If one expects stock prices to rise‚ then he/she may like to invest in stocks. However‚ buying stocks also entails risk because of price fluctuation. The risk will be potentially large in case price falls to zero. In order to avoid risk one may like to buy a call option. An American call option gives one the right‚ but not an obligation‚ to buy a specified
Premium Standard deviation Call option Option
Options 4/3/2012 Option: you have the choice to buy something for a certain price but if the price is less than that price forget about the contract. The most you ever pay is the contract price. You have the possibility of doing better. Nothing to lose only gain since you locked in a certain price; seller of contract can only do worse. The person whom makes the contract charges a price to enter into the contract‚ the seller keeps this contract. This price is called the premium‚ options start
Premium Option Call option Put option
exotic derivatives is presented‚ followed by the pricing alternatives of these securities. Hedging methods using static replication for some classes of exotic options are afterward discussed. Finally‚ risk management control of an active FX portfolio is studied. keywords: FX market‚ Exotic options‚ Option pricing‚ Barrier Options‚ Digital Options‚ Static Hedging‚ Dynamic Hedging. 1 Email: delia pirnog@yahoo.com Acknowledgment This paper was sponsored by UBS as part of an internship at Market
Premium Options Option Call option
Session 3: Case Study Covered Call and Butterfly Strategies B. Butterfly strategy 1. What is the Butterfly strategy? * A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration but three different strike prices to create a range of prices the strategy can profit from. 2. What are its advantages and disadvantages? * Large profit percentage due to low cost involve in executing the position Limited risk
Premium Call option Option Derivative
See attached. 4. Show how the total CAD cost at the end of January of hedging with an option varies under the three scenarios. (The total cost includes what you pay for the USD and what you pay for the option. You can combine this with the table in question 2.) Do you use a call or put option? Call option—pay 1.73/100 per unit in the contract (7.5m)‚ in CAD → CAD 129‚750. If exercise the call option‚ pay CAD 7‚012‚500. Total is CAD 7‚142‚250. 5. Should Pixonix hedge? (A sentence or two
Premium Derivative Option Strike price