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Hedging Portfolios using derivatives
Suppose you are a financial advisor to an investor whose portfolio consists of 400 shares of Delta Cruise Inc. stock and 10 put options on the same stock. The risk free rate is 6%, time to maturity is six months, exercise price and stock price are both at $82, and the market observed put price is $4.56. The stock does not pay out any dividend. After your analysis of the Delta Cruise Inc. stock prices, you find out that the standard deviation is at 30%. Is the investor position well hedged? What is your advice to the investor?
From the information in the following table, calculate the income elasticity of demand for this good if income increases from $10,000 to $20,000, and if income increases from $40,000 to $50,000.
The requirement is:- term paper on International Business from economic view point. The topic is effect of corruption on Chinese and Indian economy and how India's IT sector.
After two years the City of Plentiful is faced with a fiscal crisis and decides that it wants its garbage back.
Explain how high does the stock price have to rise for the option strategy to be more profitable.
Illustrate are some of the clever strategies that landlords might use to create a black market.
Prepare a chart that lists three strengths and three weaknesses of the Consumer Price Index calculation.
Suppose elasticity is -2,price is $10, and marginal cost is $8, should you raise or lower price?
Prepare a table/graph for inflation in "your country" (use North Korea for the country; if no data is available, use India) for about the latest ten year period for which you have data.
What can you say about the relationship between marginal revenue and marginal cost for output rates below the profit-maximizing (or loss-minimizing) rate? For output rates above the profit- maximizing (or loss-minimizing) rate?
What is the income elasticity? Interpret the elasticity in a mathematic and economic context -- what does this number tell you? Is the own price elasticity consistent with economic principles? Explain.
Illustrate which loan carries the lower effective rate. Consider fees to be the equivalent of other interest.
It is like the FRB has already tried to stimulate the economy by lowering interest rates
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