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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Question 1: Consider an option on dividend-paying stock when stock price $30‚ the exercise price is $29‚ the risk-free interest rate is 5% p.a.‚ the volatility is 25%p.a. and time to maturity is 4 months. Assume that the stock is due to go ex-dividend in 1.5 months. The expected dividend is 50cents. a. b. c. what is the price of the option if it is a European call? What is the price of the option if it is a European put? Use the results in the Appendix to this chapter to determine whether there
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REAL OPTIONS: STATE OF THE PRACTICE by Alex Triantis‚ University of Maryland‚ and Adam Borison‚ Applied Decision Analysis/ PricewaterhouseCoopers1 n an economic environment characterized by rapid change‚ great uncertainty‚ and the need for flexibility‚ it has become increasingly important for corporate managers to use investment evaluation tools and processes that properly account for both uncertainty and the company’s ability to react to new information. Real options has emerged as an approach
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Insurance Options in America Insurance Options in America Outline 1. What is the definition of health insurance 2. What is public health insurance 3. What is private health insurance 4. 2010 Healthcare Reform Bill 5. Conclusion [ ]Abstract Health insurance is not the first thing on the minds of seemingly
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The test will be taken down after 46 minutes. 2. Each question carries 2.5 points. 3. Answer All questions 4. Students who attempts the test twice will be given zero credit. 1 The price of a stock is $50. The stock pays a dividend of $5 in 3 months. A 6-month European put option on the stock has a strike price of $48 and a premium of $4.38. The continuously compounded interest rate is 8%. Calculate the premium for a 6-month European call option on the stock with a strike price of $48. * A
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USA. Nelson‚ JM. (1996). Economic Crisis and Policy Choice: The politics of adjustment in the Third World. Princetown University Press‚ Princeton‚ New Jersey‚ USA Gillis‚ M.‚ Perkins‚ D.H.‚ Roemer‚ M.‚ & Snodgrass‚ D.R. (1996). Economics of Development. Fouth Edition. WW Norton & Company‚ New York African World Press (1999). African Development in a Comparative Perspective‚ African World Press Inc Bryce‚ M.D. (1960). Industrial Development: A guide for Accelerated Economic Development. McGraw Hill
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Chapter 1 to 3 Chapter 9 Revision on Financial Derivatives & Properties of Options Prices • What are financial derivatives? What are their roles in finance? • Give examples of derivatives and draw their profit diagrams. • Name some financial derivatives that are traded in Bursa Malaysia. 2 • Definition A financial instrument that has a value determined by the price of something else Risk management. Derivatives are tools for companies and other users to reduce risks Speculation
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Kodak. This memo will explore the options I briefly discussed in the previous memo‚ in order to find a solution to this problem. Each option will be assessed based on the same criteria. The options to consider are: * Hire a new CEO- new bolder leadership * Enter into a new aggressive market- ink cartridges * Partner with a new company to expand popularity- NFL In order to determine which option will be most suitable for company revamp‚ all options will be assessed on an equal scale
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Chapter 2 Economics Problem Production Possibility Frontier (PPF) -boundary between those combination you chose to produce - there is a limited about of production capabilities -curve/ boundary for production possibility - the points inside curve are attainable -all points outside ppf are unattainable Production Efficiency -using resources to maximum capacity -efficiency means that if you increase production of pizza means you must give up cola (only way—no extra resources to use)
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Part B: Select the media vehicles: 6. Compare and evaluate the benefits created by selected media options and their past media performance‚ prioritise the compared media options and explain your reasoning. Suitable advertising media options Compare and evaluate the benefits TV TV is one this that everyone owns whether he/she is poor or rich. It is also the most used source of entertainment. TV is considered to be the most liable source of advertising as has also proved its worth in increasing
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