1. The put-call-forward parity relationship LEAST LIKELY includes: A. The underlying asset. B. A risk-free bond....
1. The put-call-forward parity relationship LEAST LIKELY includes:
A. The underlying asset.
B. A risk-free bond.
C. Call and put options.
2. Comparing the premium of an American-style option to an otherwise identical European option, the premium of the American option is:
A. Higher.
B. The same or lower.
C. The same or higher.
3. Which of the following is LEAST LIKELY to be classified as an alternative instrument?
A. Swaps.
B. Antique furniture.
C. Private equity funds.
4. The hedge fund strategy of buying the target company's shares and selling short the shares of the acquiring firm is a strategy within:
A. Event driven strategies.
B. Relative value strategies.
C. Equity hedge fund strategies.
Homework Answers
1]
A. The underlying asset. This is not a part of the put-call-forward parity relationship. The forward contract is used in place of the underlying asset.
B and C are incorrect - put/call options and the risk free bond are part of the put-call-forward parity relationship.
Add Answer to:
1. The put-call-forward parity relationship LEAST LIKELY
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A. The underlying asset.
B. A risk-free bond....
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HOME ASSIGNMENT PROBLEM №1 What is a forward price of an index JKL given the following...
HOME ASSIGNMENT
PROBLEM №1
What is a forward price of an index JKL given the following
information?
Date of pricing: November 15, 2019
Time till expiration: four months / Contract expires on March
15, 2020
Current value of an index: 2 803
Continuously compounded interest rate: 4.5 %
Continuously compounded dividend yield: 2.3%
PROBLEM №2
What is the value of the forward contract (specified in
problem №1) on January 15, 2020 if:
Forward price of contract with the same underlying...
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HOME ASSIGNMENT
PROBLEM №1
What is a forward price of an index JKL given the following
information?
Date of pricing: November 15, 2019
Time till expiration: four months / Contract expires on March
15, 2020
Current value of an index: 2 803
Continuously compounded interest rate: 4.5 %
Continuously compounded dividend yield: 2.3%
PROBLEM №2
What is the value of the forward contract (specified in
problem №1) on January 15, 2020 if:
Forward price of contract with the same underlying...
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