tistisSolution: Exercise 1 1. What is the difference between a long forward position and a short forward position? Ans: When the enters into a long forward contract‚ he/she is agreeing to buy the underlying asset for a certain price at a certain time in future. When the enters into a short forward contract‚ he/she is agreeing to sell the underlying asset for a certain price at a certain time in future. 2. Explain carefully the difference between hedging‚ speculation‚ and arbitrage. Ans:
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| Project Report On Investment Options And Mutual funds| | By: Pawan JhawarMahendra KumarGaurav Singh| Investment Options A number of investment options are available for Mr. Yuvaraj. However‚ each of them carries some risk. 1. Fixed Income Instruments – These instruments deliver a committed rate of return to the investor. Due to the rate of return being fixed‚ fixed income instruments are low risk options. a.Public Provident Fund – PPF[->0] is a government backed long term scheme
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Chapter 15 Quiz 15.1) A portfolio is currently worth $10 million and has a beta of 1.0. An index is currently standing at 800. Explain how a put option with a strike price of 700 can be used to provide portfolio insurance. Index goes down to 700 10*(800/700)= 8.75 million Buying put options= 10‚000‚000/800= 12‚500 If you buy the options at 800‚ the value will be 12‚500 times the index with a strike price of 700 therefore providing protection against a drop in the value of the portfolio below
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Question 1: Consider an option on dividend-paying stock when stock price $30‚ the exercise price is $29‚ the risk-free interest rate is 5% p.a.‚ the volatility is 25%p.a. and time to maturity is 4 months. Assume that the stock is due to go ex-dividend in 1.5 months. The expected dividend is 50cents. a. b. c. what is the price of the option if it is a European call? What is the price of the option if it is a European put? Use the results in the Appendix to this chapter to determine whether there
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$50. The stock pays a dividend of $5 in 3 months. A 6-month European put option on the stock has a strike price of $48 and a premium of $4.38. The continuously compounded interest rate is 8%. Calculate the premium for a 6-month European call option on the stock with a strike price of $48. * A 1.02 * B 3.36 * C 3.46 * D 4.38 * E 5.40 2 1. An "exchange call option" gives the owner of the option the right to give up one share of Stock A in exchange for receiving one share
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MIDTERM #1 Student: ___________________________________________________________________________ 1. You purchase one September 50 put contract for a put premium of $2. What is the maximum profit that you could gain from this strategy? A. $4‚800 B. $200 C. $5‚000 D. $5‚200 E. None of these is correct The following price quotations on IBM were taken from the Wall Street 2. Journal. The premium on one IBM February 90 call contract is A. $4.1250 B. $418.00 C. $412.50 D. $158.00 E. None of
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Corporate Finance Problems and prospects of future contracts and options. Acknowledgement While doing this assingment we were lucky to have some assisstance from different personnels. At first we wan to mention about our honorable course instr-uctor Md. Omar Faruque. He helped us by providing a proper guideline on how to prepare this assingment. He also encouraged us to prepared the assingment in a timely and efficient manner. Now we want to mention some other persons contribution. Mr
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VBA Option Pricer Introduction The Black Scholes Model of Stock Prices Fischer Black‚ Myron Scholes and Robert Merton made significant advances in the development of options pricers with their papers published in 1973. According to the Black Scholes model‚ the price path of stocks is defined by the following stochastic partial differential equation The development of a transparent and reasonably robust options pricing model underpinned the transformational growth of the options market
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The book The Giver is a dystopia. It is a dystopia because you get your bike at 12 years old‚ they kill small children‚ and they can’t leave the community. Children in The Giver receive their bikes when they are twelve. I think that is too old.I think you need to get your bike it eight years old.Because if you get your bike at 8 you can practice. So when you get twelve you will know how to ride your bike to where you need to go. So you need to get your bike taller than twelve. In the b community
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Nothing is but what is not Macbeth is faced with the burden of choosing between acting on good or evil because of the witch’s prophecy to him. They claim it is in the prophecy for Macbeth to be king; this leaves Macbeth with the difficult decision of killing the current king‚ because for the prophecy to become true‚ Duncan must die. He thinks to himself that this supernatural soliciting cannot be good nor can it be evil. If what the witch’s said is evil‚ then how is he Thane of Cawdor? Macbeth
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