Fins2624 Sample Q

Satisfactory Essays
77. List two types of exotic options and describe their characteristics.

Answer: There are five exotic options mentioned in the textbook:
• Asian Options have payoffs that depend on the average price of the underlying asset during at least some portion of the life of the option.
• Barrier Options have payoffs that depend both on the asset's price at expiration and on whether the underlying asset's price has crossed through some barrier. If the asset's price crosses the barrier the option might automatically expire. Or if the asset's price does not cross the barrier the option may not pay.
• Lookback Options have payoffs linked to the maximum or minimum price during the life of the option. The option would “look back” to see what the relevant price was and the payoff would be based on that rather than on the price at the expiration date.
• Currency-Translated Options have either asset or exercise prices denoted in a foreign currency. For example, an exchange rate may be specified as the rate at which a foreign currency can be converted into dollars.
• Binary Options are based on two possible outcomes – yes or no. If a specified event happens, the option may make a payoff of a fixed amount. If the event does not happen, there may be no payoff. The opposite arrangement is also possible.

This question gives the student an opportunity to explore some of the results of financial engineering. It verifies the student's understanding of items that go beyond the basic options.

Difficulty:

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Sample Q

    • 326 Words
    • 1 Page

    (Answer Key Listed on the Last Page) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) When backed by buying power, wants become ________. A) self-esteem needs B) physical needs C) demands D) exchanges E) social needs 2) When dealing with a(n) ________, managers must decide whether to invest in it in an attempt to build it into a star or cash cow or whether to phase it out. A) cash cow B) cat C) exclamation mark D) dog E) question mark…

    • 326 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    Student Q Sample

    • 4478 Words
    • 18 Pages

    Student Q Manual Nell Kimberley and Glenda Crosling Faculty of Business and Economics Monash University First published 1994 Reprinted 1995 Second edition 1997 Reprinted with revisions 1998 Third edition 2005 Fourth edition 2008 Copyright © Monash University 2008 Published by the Faculty of Business and Economics Monash University Caulfield East Victoria 3145 Australia Contents Preface and Acknowledgements Chapter 1 Introduction 1.1 1.2 1.3 Welcome Monash University Faculty of Business…

    • 4478 Words
    • 18 Pages
    Powerful Essays
  • Satisfactory Essays

    Sample Media Interview Q&A Internal Question & Answer (Q&A) documents are often developed to prepare media spokespersons for interviews and include tougher questions than FAQs. Internal Q&As also include areas of vulnerability (e.g. who is to blame and could the medical response have been quicker?) Use the sample Q&As below as a guide to create your own during a crisis event. Q: What happened? (Examples: How many people were injured or killed? How much property damage occurred?) A: At approximately…

    • 412 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Fins2624 Course Outline

    • 4793 Words
    • 20 Pages

    lineAustralian School of Business School of Banking and Finance FINS 2624 Portfolio Management Course Outline Semester 2, 2012 Part A: Course-Specific Information Part B: Key Policies, Student Responsibilities and Support Table of Contents 0 PART A: COURSE-SPECIFIC INFORMATION 1 2 2.1 2.2 2.3 2.4 2.5 3 STAFF CONTACT DETAILS COURSE DETAILS Teaching Times and Locations Units of Credit Summary of Course Course Aims and Relationship to Other Courses Student Learning Outcomes LEARNING AND…

    • 4793 Words
    • 20 Pages
    Powerful Essays
  • Satisfactory Essays

    FINS2624 S2 2012 Mockterm FAMILY NAME OTHER NAMES STUDENT ID SIGNATURE THE UNIVERSITY OF NEW SOUTH WALES SCHOOL OF BANKING AND FINANCE TIME ALLOWED: N/A To make sure that we can identify your exam if your student ID number is hard to read, please tick the boxes below to fill in your seven digit student ID number. Detailed instructions are on the next page. 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 M oc kt Page 1 of 21 Please see over er FINS2624 PORTFOLIO MANAGEMENT MOCK MID-TERM…

    • 6053 Words
    • 25 Pages
    Satisfactory Essays
  • Powerful Essays

    Fins2624 Notes

    • 3521 Words
    • 15 Pages

    BOND PRICING CHAPTER 1 Floating Rate bonds * Floating rate bonds make interest payments that are tied to a measure of current market rates Example: Rate may be adjusted annually to the current T bill rate plus 2% * Major risk involved for floaters is due to the changes in the firm’s financial strength * Yield spread is fixed over life of security however if the firm’s strength deteriorates then investors would demand a greater yield premium * This makes the price of bonds…

    • 3521 Words
    • 15 Pages
    Powerful Essays
  • Good Essays

    Q AND A

    • 1498 Words
    • 6 Pages

    Interview Q/A Top 3 Strengths: 1. I am very adaptable and accepting of change with new processes or initiatives. I understand the importance of change, especially with technology. I enjoy leading the change with positive encouragement and watching as new operations gain acceptance and become successful, such as the export successes of the various companies I work with. 2. I have the ability to use my own initiative to take on challenges. I am always proactive at what i do and that keeps my…

    • 1498 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    A s ae o . s h r d n. . Online Quiz Questions for Week 3 Topic: Term Structure Question: Assume that coupon interest is paid annually and all bonds have a face value of $100. Given the yields to maturity of the i) 1‐year 13% coupon bond, ii) 2‐year 11.5% coupon bond and iii) 3‐year 9% coupon bond are 10%, 9.5% and 9% respectively. Compute f(1,2), the interest rate of a 1‐year bond in 2 years’ time. Correct Answer: 7.88% Question: Suppose that all investors expect that interest r…

    • 7922 Words
    • 32 Pages
    Satisfactory Essays
  • Good Essays

    Q Versus Q

    • 1061 Words
    • 5 Pages

    Animal vs. Plant: Proteins Inequality Valerie Curren Breckinridge School of Nursing @ ITT Professor Washington EN1320- Composition 1 Our bodies must have protein to survive. Protein forms many body structures, including muscles, skin, and hair, and maintains and replaces tissues in your body. We get our protein from the food we consume but not all protein is created equally. Most people associate protein with meat but protein can be found in plant based foods too. The U.S. recommended daily…

    • 1061 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Q

    • 642 Words
    • 2 Pages

    <Asahi Breweries, Ltd.> 1. What are the characteristics of the Japanese beer industry? What are key success factors? The characteristics of the Japanese beer industry could be explained by one of the external environment analysis called ‘General Environment Analysis’. By applying ‘General Environment Analysis’, Japanese beer industry could be analyzed by six components. We will look more in details in accordance with five sectors among six; Economic, Sociocultural, Technological, Political/Legal…

    • 642 Words
    • 2 Pages
    Good Essays