Chapter 15 Quiz 15.1) A portfolio is currently worth $10 million and has a beta of 1.0. An index is currently standing at 800. Explain how a put option with a strike price of 700 can be used to provide portfolio insurance. Index goes down to 700 10*(800/700)= 8.75 million Buying put options= 10‚000‚000/800= 12‚500 If you buy the options at 800‚ the value will be 12‚500 times the index with a strike price of 700 therefore providing protection against a drop in the value of the portfolio below
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|Option proposal | |Option name: |Docushare Software Package | |‘What do the options relate to?’ | | |Option sub-type
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etc. Tokyo Disneyland Tokyo Disneyland owned and operated by an unrelated Japanese corporation and was opened to the public on April 15‚ 1983. The Walt Disney Company receives royalties for the use of the Disneyland name from this unrelated Japanese corporation‚ and these royalties are paid in yen. Financial Situation Exhibit 1 shows the Income Statement and Exhibit 2 shows the assets and borrowings of The Walt Disney Co.‚ (year ended September 30‚ in thousands‚ except per share data)
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Many years ago stock options were rarely used as incidental benefits for top executives. Nowadays‚ compensating employee whit stock options has become an increasingly common practice. Before the year 1996‚ only the intrinsic value method was used to record these transactions. This method distorted the issuer’s reported financial condition and results of operations‚ which could lead to inappropriate decisions taken by investors. Followed by the increased use of employee stock options and the surrounding
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What are some of the themes that are central to the film? How have they been communicated? Ridley Scott’s 1982 sci-fi‚ noir‚ thriller‚ Blade Runner‚ uses the importance of empathy to capture the flaws of species. The theme is perhaps most evident in the character of Roy Batty. The film develops the character as a “villain‚” as he does devious things‚ appears sinister and delivers dialogue with a British accent. However‚ much to the audience’s confusion‚ the character is anything but a villain. Roy
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English 101 Research Paper #2 Final Draft Homelessness Is Not An Option We see them as a crowd‚ a collective entity; we call them the homeless‚ as if that defines who they are‚ but we neglect to add the unspoken word in that title: people. People whom with social disabilities or financial problems usually will be abandoned by the society and become homelessness along the streets. ¡§During the past year‚ over two million men‚ women‚ and children‚ or nearly one percent of the US population‚ were
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Alburt Sling Blade Growing up as a child for Karl was hard. His parents were abusive‚ being so young and naïve he did not know any better. Karl parents also made him do horrific things‚ such as giving him his baby brother and telling him to get rid of it. After Karl spending several years in a hospital institution because he killed his mother and her boyfriend. Karl is let loose. Despite all of the events that
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Practice Questions-“Real Options” Some questions may require you to use financial calculator or Excel. (In the final exam‚ for students without financial calculator‚ writing down the formula will be enough. However‚ those formulas must be correct to get full credit. Therefore‚ it is a good practice to check whether you are correct by using Excel for these practice questions) 1. How are real options different from financial options? 2. Consider the following project data: (1) A
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Gay Option In the article “The Gay Option”‚ Stephanie Fairyngton argues that it is wrong to think about homosexuality as deviations from nature’s norm. She understands that it is easy for people to think about homosexuality as an illness rather than a person’s choice. The main reason for this is that it is hard to understand people who choose this challenging state of beings. Because society has a stereotype of heterosexuality as somehow better choice than homosexuality‚ they would think that person
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arbitrage. Ans: A trader hedges when he/she has an exposure to the price of an asset and takes a position in a derivative to offset the exposure. In the case of speculation‚ the trader has no such exposure to offset. The trader is simply betting on the future movements of the asset. Arbitrage involves taking a position in two or more markets to lock in a profit. 3. Can you explain the difference between selling a call option and buying a put option? Ans: Selling a call option involves giving someone
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