Differentiate between implied and historical volatility, Risk Management

Assignment Help:

Question 1:

(a) What are the distinct types of assets under which derivatives can be based upon?

(b) Give at least 5 risks that justify the existence of derivatives? Endorse your answer using appropriate examples.

(c) Distinguish between futures and forwards.

Question 2:

(a) Mathematically derive the following positions:

i. Long position on a call option
ii. Short position on a put option

(b) Differentiate between implied volatility and historical volatility.

(c) Why options are considered as leveraged instruments? Explain fully with a proper example.


Related Discussions:- Differentiate between implied and historical volatility

Option Pricing, #question.Price a European call and put option using expli...

#question.Price a European call and put option using explicit, implicit and cranck nicholson methods in Matlab or R.

Risk and Return – Stock Valuation, The Case: Recently after graduating from...

The Case: Recently after graduating from Local Business College (LBC), you have started your own investment consultancy firm – Prudent Consultants (PC’s) to earn your livelihood. M

Develop strategies to eliminate risk, Develop strategies to eliminate, miti...

Develop strategies to eliminate, mitigate, deflect or accept risk • Risk treatment strategies: Risk avoidance, reduction, transfer and retention • The types of controls that can

Leverage, evaluate the importance of leverage in financial management of a...

evaluate the importance of leverage in financial management of a small company

How can risks be managed in the public sector, Question 1: i) How may ...

Question 1: i) How may risks be managed in the Public Sector? ii) Will e-government be an efficient means of providing financial information? Question 2: i) What a

Explain main objectives of a marine park, Question: (i) Describe a Mari...

Question: (i) Describe a Marine Protected Area; what are the types of Marine Protected Areas that exist in the Republic of Mauritius, naming one example of each (ii).

Risks associated with cyclone and storm activity, Part A Glenda has ta...

Part A Glenda has taken a household insurance on her classic Queenslander home in North Queensland.  At the time of application, the insurer "URINSURED" asked numerous questio

Internal control, policies for non-cash generating assets

policies for non-cash generating assets

Synergy, Synergy This is the concept in which two or more various busin...

Synergy This is the concept in which two or more various businesses, activities, or procedure will. When it working together they create an overall value greater than that of t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd