Assignment 1 Derivatives Markets
BUSN3031/9244 Derivatives and Risk Management
Assignment 1 (due March 19)
Each question is worth 1 point. The assignment consists of 10 questions. Please write your name and student number on top of the first page of the assignment. Please provide the relevant calculations. Assignment is individual.
Assignments should be lodged at the next lecture (if you intend not to attend the lecture but would like to submit assignment, contact topic coordinator). Emailing assignment is not an option as one needs to get a permission in advance to do so. If you have been granted the permission then the assignment needs to be submitted before the start of the lecture, i.e. before 1pm. In case the assignment is submitted after 1pm, it will not be marked.
Your assignment must include the following declaration (otherwise, the assignment will not be marked). The declaration text can be handwritten or typed. You must sign the declaration.
DECLARATION
I am aware of the University’s policy on Academic Integrity, and, except where appropriately acknowledged, this assignment is my own work, has been expressed in my own words and has not previously been submitted for assessment.
………………………… ………………………… Signature Date
1. Who from the following list would be considered a speculator by entering into a futures or options contract on commodities?
A) Corn delivery truck driver B) Food manufacturer C) Farmer D) None of the above
2. Assume that you open a 100 share short position in Jiffy, Inc. common stock at the bid-ask price of $32.00 – $32.50. When you close your position the bid-ask prices are $32.50 – $33.00. If you pay a commission rate of 0.5%, calculate your profit or loss on the short investment? 3. If your homeowner's insurance premium is $1,000 and your deductible is $2000, what could
Assignment 1 (due March 19)
Each question is worth 1 point. The assignment consists of 10 questions. Please write your name and student number on top of the first page of the assignment. Please provide the relevant calculations. Assignment is individual.
Assignments should be lodged at the next lecture (if you intend not to attend the lecture but would like to submit assignment, contact topic coordinator). Emailing assignment is not an option as one needs to get a permission in advance to do so. If you have been granted the permission then the assignment needs to be submitted before the start of the lecture, i.e. before 1pm. In case the assignment is submitted after 1pm, it will not be marked.
Your assignment must include the following declaration (otherwise, the assignment will not be marked). The declaration text can be handwritten or typed. You must sign the declaration.
DECLARATION
I am aware of the University’s policy on Academic Integrity, and, except where appropriately acknowledged, this assignment is my own work, has been expressed in my own words and has not previously been submitted for assessment.
………………………… ………………………… Signature Date
1. Who from the following list would be considered a speculator by entering into a futures or options contract on commodities?
A) Corn delivery truck driver B) Food manufacturer C) Farmer D) None of the above
2. Assume that you open a 100 share short position in Jiffy, Inc. common stock at the bid-ask price of $32.00 – $32.50. When you close your position the bid-ask prices are $32.50 – $33.00. If you pay a commission rate of 0.5%, calculate your profit or loss on the short investment? 3. If your homeowner's insurance premium is $1,000 and your deductible is $2000, what could