Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q1. Explain the similarities and the differences between ABS and ABS CDO. Q2. Currently, the stock price is $40. A European call option with a strike price of $50 expiring in 2 years is trading at $20. And the put option with a strike price of $30 is trading at $15. a. Suppose an investor buys 200 shares of stock, shorts 200 call options, and buys 200 put options. Construct a table showing the investor's profits (not payoff) for a range of possible stock prices in 2 years. If you don't know the difference between profit and payoff, review week 1 class. In addition, please remember that when the investor shorts an option, he receives (not pay) the option price upfront. Here's how to construct the Excel table: Create a column of stock prices in 2 years ranging from $1, $2, $3, ... to $80. Then use the next 3 columns to calculate profits the stocks, calls, puts (one column for each position). Pay attention to whether it's a long or a short position. Then add all the profits from these three positions (stock, call, put) to calculate the total profits in the next column. The final step is to graph these profits (y-axis) against the stock prices in the first column (x-axis). You can do this in Excel with Insert>Charts>Scatter. If you don't know how, then type "scatter chart" in Excel help window and follow the instruction. Your profit for long put option should look similar to Figure 9.2 in page 213 and the profit for short call should look similar to Figure 9.3. b. The strategy in part a is called "collar" strategy. Explain when an investor may want to use this strategy. Q3: What are the differences between (a) (exchange-traded) call options and (b) warrants/employee stock options/convertibles? Q4. The current price of a stock is $94, and a three-month European call option with a strike price of $95 currently sells for $4.70. An investor who feels that the price of the stock will increase is trying to decide between investing in 100 stocks and investing in 2,000 call options (20 contracts) for 3 months. Both strategies cost an initial investment of $9,400. How high does the stock price have to rise in 3 months for the option strategy to be more profitable than the stock strategy? In other words, at what stock price, will the 2 strategies result in the same profit?
Evaluate the following statements concerning variance analysis.
Decision making among buy and lease and Your landscaping company can lease a truck for $8000 a year (paid at year end) for 6 years
The NuPress Valet Corporation has an improved version of its hotel stand. The investment cost is expected to be $72 million and will return $13.5 million for five years in net cash flows.
beta industries has net income of 100000 and it has 1170000 shares of common stock outstanding. the companys stock
Which of the following is typically a characteristic of the mechanistic model of organization?
Annual expenses are expected to be: labor of $50,000; $30,000 in rent; $10,000 in equipment depreciation. The tax rate is 35%. Calculate the expected Net Income.
Suppose that a US interest rate is 4% and the forward rate for the Korean won is 1 won = $0.001 and the spot rate is 1 won = $0.0011. What is the interest rate in the Korean market? (Assume that the US is home and the interest rate parity holds.)
1. what is the risk on different financial assets and what is affecting their risk?2. how many different bonds and
in measuring the comparative performance of different fund managers the preferred method of calculating rate of return
cloud 9s salcloud 9 sales were 500000 during 2005 and its year-end assets were 400000. for 2006 sales are expected to
How can a modern organization blow up the estimation of its stock in order to decrease net pay and the duties is needs to pay that year?
What financial basics should be considered when determining the most appropriate amount of short term borrowing
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd