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!
Collar
A collar can be established by holding a share, along with purchasing a protective put and writing a covered call, where both options at out-of-money..
For Example - ONGC
Underlying stock = Rs. 809
Buy Mar Rs. 800 Put @ Rs.16
Write Mar Rs. 880 Call @ Rs.7.25
Total price for this strategy = 809 + 16 + 7.25 = Rs. 832.25
Maximum Profit: Limited
Call strike - Initial spot price - Put Premium = 880 - 809 - 16 = Rs. 55
Maximum Loss: Limited
Initial spot price - Put strike + Call Premium = 809 - 800 + 7.25 = Rs. 16.25
So an arbitrage opportunity to the tune of Rs. 55 (max) is available if the price target of Rs. 880 or beyond is achieved. On the flip side, we have losses, which are capped at a maximum of Rs 16.25 for price Rs. 800 and below.
Presently, the spot exchange rate is $1.50/£ and the three-month forward exchange rate is $1.52/£. The three-month interest rate is 8.0% per year in the U.S. and 5.8% per year in t
Why do firms enter an industry when they know that in the long run economic profit will be zero? Firms enter an industry while they suppose to earn economic profit. These shor
Evaluate d importance of leverage in a financial management of a small sacle business
What is the decision rule for accepting or rejecting proposed projects when using net present value? When going with the net present value decision rule any project with a net
Illustration Consider a Rs.1,000 par value bond whose current market price is Rs.850. The bond carries a coupon rate of 8% and has a maturity period of 9 years. Wha
Explain the factors affecting the choice of a minimum cash balance amount. The minimum cash balance amount is defined by how easy it is to raise funds when required, how expected
International bonds are divided into two categories namely, foreign bonds and euro bonds. Foreign bonds are issued by a borrowing company in another
Goal of Shareholders wealth maximisation Shareholders' wealth maximisation goal gives us the best results since effectsof all the decisions taken by company and its managers ar
Q. Show the Transaction risk? This is the risk occur on short-term foreign currency transactions that the actual income or cost may be different from the income or cost expecte
Gary and Joyce Yau, both 30, last month bought their dream house in London, Ontario. The purchase price was $450,000 plus addition fees such as taxes, legal fees, administration fe
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