CHAPTER 3 Hedging Strategies Using Futures Practice Questions Problem 3.8. In the Chicago Board of Trade’s corn futures contract‚ the following delivery months are available: March‚ May‚ July‚ September‚ and December. State the contract that should be used for hedging when the expiration of the hedge is in a) June b) July c) January A good rule of thumb is to choose a futures contract that has a delivery month as close as possible to‚ but later than‚ the month containing the expiration
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is baWhy Options Are Better Than Futures For Hedging Futures trading can be used for two main purposes; Speculation and Hedging. While most retail futures traders get involved in futures trading for the purpose of leveraged speculation‚ it cannot be forgotten that the true purpose of futures contracts is for the purpose of hedging. Hedging using futures is technique most professional money managers use for decades. However‚ there is one main problem with hedging using futures and that is the
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10th International Conference on Fast Sea Transportation FAST 2009‚ Athens‚ Greece‚ October 2009 MOTOR YACHT HULL FORM DESIGN FOR THE DISPLACEMENT TO SEMI-DISPLACEMENT SPEED RANGE Perry van Oossanen1‚ Justus Heimann2‚ Juryk Henrichs3‚ Karsten Hochkirch4 1 Naval Architect‚ Van Oossanen & Associates bv‚ Costerweg 1F‚ 6702AA‚ Wageningen‚ the Netherlands 2 Head of Hydrodynamics‚ FutureShip GmbH‚ Benzstr. 2‚ D-14482 Potsdam‚ Germany 3 Hydrodynamicist‚ Van Oossanen & Associates bv‚ Costerweg
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business world nowadays‚ being ethical is vital to maintain the confidence of consumer. Meanwhile‚ the professional ethics of auditors are more significant to increase usefulness of financial statement and users’ confidence towards financial statement. 5 professional ethics that auditors must possess are (1) Objectivity‚ member should not allow bias‚ conflict of interest or undue influence of others to override professional or business judgement. (2)Professional behaviour‚ member should comply with relevant
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the demand for the international money and finance instruments increased significantly at the global level. Changes in stock market prices‚ interest rate and exchange rates at the different financial market have increased the financial risk to the corporate world. In order to manage to such risks‚ the new financial instruments have been developed in the financial markets‚ which are popularly known as DERIVATIVES. As Financial Instruments‚ Derivatives has become
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implement the proposed employee stock option plan? In a typical stock option plan‚ the employee is offered a specific number of shares which he/she can exercise (buy) at some specified time in the future. The price at which the employee can buy the stock is equal to the market price at the time the stock option was granted (grant price). The employee ’s gain is equal to the market value of the stock at the time it is exercised‚ less the grant price. If the market price of the stock remains the same
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efficiency of such indexes. This study investigates whether stock market indexes based on an array of cap-indifferent measures of company size are more mean–variance efficient than those based on market cap. These “Fundamental” indexes were found to deliver consistent‚ significant benefits relative to standard cap-weighted indexes. The true importance of the difference may have been best noted by Benjamin Graham: In the short run‚ the market is a voting machine‚ but in the long run‚ it is a weighing
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Chapters 10-11 / page 1 - Introduction to Derivative Markets FI 4200/AFM Characteristics of Options r Definitions and Positions: - A Call Option gives its owner for a specified time the right to purchase an underlying good at a specified price (= exercise price or strike price) - A Put Option gives its owner for a specified time the right to sell an underlying good at a specified price (= exercise/strike price) - An American Option permits the owner to exercise (=buy/sell the underlying)
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and reliable information e. valid information (Answer: a; p. 97; Easy) 2. An MIS consists of people‚ equipment‚ and procedures to gather‚ sort‚ _____‚ evaluate‚ and distribute information to marketing decision makers. a. test b. test market c. analyze d. critique e. assess (Answer: c; p. 97; Easy) 3. Your firm has just developed its first successful MIS. It interacts with information users to assess information needs‚ develop needed information‚ _____ the marketing information
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POINT/COUNTER-POINT: Should Speculators Use Currency Futures or Options? POINT: Speculators should use currency futures because they can avoid a substantial premium. To the extent that they are willing to speculate‚ they must have confidence in their expectations. If they have sufficient confidence in their expectations‚ they should bet on their expectations without having to pay a large premium to cover themselves if they are wrong. If they do not have confidence in their expectations‚ they
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