T-bill matured in 67 days, we must use 68 days since that is the option's time to expiration. 2. (Minimum Value of a Call) This would create an arbitrage opportunity. The call would be purchased and immediately exercised. For example, suppose S0 = 44, X = 40, and the call price is $3. Then an investor would buy the call and immediately exercise it. This would cost $3 for the call and $40 for the stock. Then the stock would be immediately sold for $44, netting a risk-free profit of $1. In other
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Copyright © 2009 by National Stock Exchange of India Ltd. (NSE) Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 INDIA All content included in this book, such as text, graphics, logos, images, data compilation etc. are the property of NSE. This book or any part thereof should not be copied, reproduced, duplicated, sold, resold or exploited for any commercial purposes. Furthermore, the book in its entirety or any part cannot be stored in a retrieval system or transmitted in any
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5. A recommended option hedging strategy based on your 1 year target price. Assume you own 1000 shares of the stock. Select either a covered call strategy or a protective put strategy. Calculate the outcome assuming the stock attains your 1 year price target. 6. A recommended Bull Call Spread or Bear Call Spread based on your 1 year price target. Calculate the outcome assuming the stock attains your 1 year price target. Use 100 contracts for your
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OPTIONS FOR THE BEGINNER AND BEYOND In an increasingly competitive world, it is quality of thinking that gives an edge—an idea that opens new doors, a technique that solves a problem, or an insight that simply helps make sense of it all. We work with leading authors in the various arenas of business and finance to bring cutting-edge thinking and best-learning practices to a global market. It is our goal to create world-class print publications and electronic products that give readers
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Merit Enterprise Corp. Sara Lehn, chief financial officer of Merit Enterprise Corp., was reviewing her presentation one last time before her upcoming meeting with the board of directors. Merit�s business had been brisk for the last two years, and the company�s CEO was pushing for a dramatic expansion of Merit�s production capacity. Executing the CEO�s plans would require $4 billion in capital in addition to $2 billion in excess cash that the firm had built up. Sara�s immediate task was to brief the
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White Fang is a very interesting and suspense novel written by Jack London. I was tempted to rush the book as it was very interesting. I couldn’t stop turning the page. In White Fang, Henry, a young adult, and Bill, Henry’s friend, are out in the wild of the north. They have only six sled dogs and 3 bullets in a gun. They are very desperate because they are being followed by a pack of voracious wolves. One night, they notice that there are seven dogs to feed. Then the next day there are only five
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Telephone Calls - an illustration for effective communication The following are some examples of how the principles of effective communication can be applied when handling telephone calls. (a) Nature of Telephone Calls As a medium commonly used in communication, the telephone requires instant and quick responses. Since the caller and the other party do not see each other, communication can only be effective by using the correct words in the appropriate intonation and style, especially in
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for a company called Vangent. At Vangent we received inbound calls from Medicare beneficiaries about their Medicare insurance and healthcare claims that had been filed for services rendered to them by their physicians. The calls would be from different people of all races, ethnicities, and nationalities so effective in my communication with the beneficiaries was a part of my everyday job duty. Most of the beneficiaries I received calls from were at least age 65 and above and sometimes it was difficult
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ASSIGNMENT: due at Tuesday March 10th 1545 hours (2015) Please hand in the assignment to the lecturer Ludger Buijs at the beginning of the lecture on March 10th or hand in the assignment in the box close to the secretarial office of the Economics Department (T. v. A. 5.01.74). This assignments is meant to be group work (max. 4 students[1]) Some questions are taken from Hull’s book. In this case I refer to the book: John Hull, Fundamentals of futures and option markets, 7th edition, 2011. Problems
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How to use annuities as a put option on your retirement A put option is a commonly used stock market strategy to protect against the decline of a holding below a specific price. Many savvy investors use this downside protection plan as insurance against unpredictable market volatility or unforeseen economic events. Planning for the unknown downturn with your investments makes sense, and annuities could be used in a similar fashion by serving as a put option on your life. Hope for the best, prepare
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