Basic Derivative Problems 1. (Answers are in red) Select the family member who is offering the most diversification to the rest of the family. A. Dad works for General Motors C. Daughter works for Jiffy Lube 2. Assume that you purchase 100 shares of Jiffy‚ Inc. common stock at the bid-ask prices of $32.00-$32.50. When you sell the bid-ask prices are $32.50-$33.00. If you pay a commission rate of 0.5%‚ what is your profit or loss? A. $0 3. D. $32.50 loss B. $16.25 loss C.
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Futures contract In finance‚ a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) but with delivery occurring at a specified future date‚ the delivery date. The contracts are traded on a futures exchange. The party agreeing to buy the underlying asset in the future‚ the "buyer" of the contract‚ is said to be "long"‚ and the party agreeing to sell the asset
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What is the difference between Derivative action and Statutory derivative action? Top of Form Firstly‚ Derviative action is the exception of Foss v Harbottle. It is also called the Common Law dericvative action. To fulfill this action‚ there are 2 components. The first one is the "fraud of monority" which is the abuse of controlling power. It means that the directors or the majority secure a benefit at the expense of the company. The abuse of power results in the personal gain. The second component
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Section 1.2 (Page 87) (Calculus Book): 14‚ 23‚ 26‚ 29‚ 30‚ 31‚ and 32 14. limt→1t3+t2-5t+3t3-3t+2 =limt→1t3+t2-5t+3t3-t2+t2-t-2t+2 =limt→1t3-t2+2t2-2t-3t+3t2t-1+tt-1-2t-1 =limt→1t2t-1+2tt-1-3t-1t2+t-2t-1 =limt→1t2t-1+2tt-1-3t-1t-2t-1 =limt→1t-1t2+2t-3t-2t-1 =limt→1t2+3t-t-3t2+2t-t-2 =limt→1tt+3-1t+3tt+2-1t+2 =limt→1t+3t-1t+2t-1 =limt→1t+3t+2=1+31+2=43 23 limy→6y+6y2-36=limy→6y+6y+6y-6 ⟹limy→61y-6=16-6=10=undefined ∴limit doesn’t exist 26 limx→43-xx2-2x-8=limx→43-xx2-4x+2x-8=limx→4 3-xxx-4+2x-4
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FINM3405 Derivatives & Risk Management Tutorial 6 Reference Material Lecture 8 (class notes and lecture slides) Tutorial Questions Question 1 A stock is currently priced at $20. In any given 4-month period‚ stock price will either go up by 18.91% or down by 15.9%.1 The riskless rate of interest is 4% per annum continuously compounded. A European-style call option is written on this stock with a $12 strike price and 8 months to expiry. a) b) c) d) Use the delta-hedging approach to price this
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CHAPTER 24 DERIVATIVES AND RISK MANAGEMENT Please see the preface for information on the AACSB letter indicators (F‚ M‚ etc.) on the subject lines. True/False Easy: (24.1) Risk management FP Answer: a EASY 1. One objective of risk management can be to reduce the volatility of a firm’s cash flows. a. True b. False (24.4) Swaps FP Answer: b EASY 2. Interest rate swaps allow a firm to exchange fixed for floating-rate payments‚ but a swap cannot reduce
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MAT 115.1647 Gerard Martinez Md Habib APPLICATIONS OF FUNCTIONS PROJECT 1. Exercise and heart rate: The data in the table below represent the maximum benefit to the heart from exercising‚ if the heart rate is in the target heart rate zone. Age‚ x Maximum number of heart beats‚ y 20 140 30 133 40 126 50 119 60 112 70 105 a) Plot the data in the table above. What kind of pattern can you observe from your graph? b) What type of relationship appears to exist between
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The Impact of Derivatives on Cash Markets: What Have We Learned? Stewart Mayhew Department of Banking and Finance Terry College of Business University of Georgia Athens‚ GA 30602-6253 October 27‚ 1999 Revised: February 3‚ 2000 The Impact of Derivatives on Cash Markets: What Have We Learned? Abstract This paper summarizes the theoretical and empirical research on how the introduction of derivative securities affects the underlying market. A wide array of theoretical approaches has been applied
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Lesson 08.11 Exponential and Logarithmic Functions Activity Materials: Bowl 100 dimes Laptop Geogebra Microsoft word Pencil Paper Procedure: Count the total number of pieces of candy‚ coins‚ or whatever object you have chosen and record this number in the chart shown below. Total Number of Objects Spill this object on the flat surface and count the number of objects which land face up and the number of objects which land face down. Record each number in the chart above in the row
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1. Both forward and futures contracts are traded on exchanges. : False 2. Futures contracts are standardized; forward contracts are not. : True 3. The S&P500 index futures contract is a physical delivery contract. The pork bellies futures contract is a cash-settled contract. : False 4. An American option can be exercised at any time during its life. : True 5. A put option will always be exercised at maturity if the strike price is greater than the underlying asset price. : True
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