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Suppose a corporate treasurer asks you to construct the following derivative: "I will have 1 million...
3. You are given the following exchange rates: Exchange Rates Time 0 Time 1 So Si...
3. You are given the following exchange rates: Exchange Rates Time 0 Time 1 So Si USD / GBP 1.8558 1.8561 USD/EUR 1.2674 1.2622 CAD / USD 1.3111 1.3129 MXN / USD 10.7575 10.6780 AUD/USD 1.3095 1.3025 ZAR / USD 6.8330 6.8850 Where: GBP = British Pound: CAD Canadian Dollar; MXN - Mexican Peso; AUD = Australian Dollar; ZAR = South African Rand Using the information above: a. Which foreign currencies are directly quoted? b. Which foreign currencies are indirectly...
Q10) Your firm has a British customer that is willing to place a $1 million order,...
Q10) Your firm has a British customer that is willing to place a $1 million order, but wants to pay in pounds instead of dollars. The spot exchange rate is S1.85 1.00 and the one-year forward rate is S1.90-£1.00. The lead time on the order is such that payment is due in one year. What is the fairest exchange rate to use? A) S1.8750- £1.00 B) S1.85 £1.00 C) $1.90-£1.00 D) none of the options Q11) Your firm is a...
15 Suppose that the current exchange rate is €1.00 - $1.60. The indirect quote from the...
15 Suppose that the current exchange rate is €1.00 - $1.60. The indirect quote from the US. perspective is A) €0.6250 - $1.00 3) €1.50 - $1.00 €1.00 - $1.60 Dy none of the options 19) The bid price A) is the price that a dealer stands ready to pay B) is the price that a dealer stands ready to sell at. is the price that the dealer has just paid for something, his historical cost of the most recent...
Suppose that you have $1 million and the following two opportunities from which to construct a...
Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: a. Risk-free asset earning 11% per year. b. Risky asset with expected return of 26% per year and standard deviation of 34%. If you construct a portfolio with a standard deviation of 24%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place.) Expected return on portfolio I
Suppose that you have $1 million and the following two opportunities from which to construct a...
Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: a. Risk-free asset earning 8% per year. b. Risky asset with expected return of 23% per year and standard deviation of 31%. If you construct a portfolio with a standard deviation of 22%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place.) Expected return on portfolio
Suppose that you have $1 million and the following two opportunities from which to construct a...
Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: a. Risk-free asset earning 11% per year b. Risky asset with expected return of 35% per year and standard deviation of 42% If you construct a portfolio with a standard deviation of 30%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place.) Expected return on portfolio
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...
Assume the following premia: Strike $950 Call $120.405 93.809 84.470 71.802 51.873 Put $51.777 74.201 1000...
Assume the following premia: Strike $950 Call $120.405 93.809 84.470 71.802 51.873 Put $51.777 74.201 1000 1020 84.470 101.214 1050 1107 137.167 I 1) Suppose you invest in the S&P stock index for $1000, buy a 950-strike put, and sell a 1050- strike call. Draw a profit diagram for this position. What is the net option premium? 2) Here is a quote from an investment website about an investment strategy using options: One strategy investors apply is a "synthetic stock."...
I need help with problem 3 only, please show all the calculations with details, don't just...
I need help with problem 3 only, please
show all the calculations with details, don't just list numbers or
put them on a table using excel. I need to understand how did you
get each thing. Thanks
HUBE 466-566-P12020(2) - Compatibility Mode 18109361685 0 - 0 X File Home Insert Draw Design Layout References Mailings Review View Help Tell me what you want to do Share Comments .T .XIIII.1.IIII.2. IIII.3. III.4IIIII.5. III.6''T'.7 Problem 4. (3 points) A U.S. investor has...
3. You are given the following exchange rates: Exchange Rates Time 0 Time 1 So Si USD / GBP 1.8558 1.8561 USD/EUR 1.2674 1.2622 CAD / USD 1.3111 1.3129 MXN / USD 10.7575 10.6780 AUD/USD 1.3095 1.3025 ZAR / USD 6.8330 6.8850 Where: GBP = British Pound: CAD Canadian Dollar; MXN - Mexican Peso; AUD = Australian Dollar; ZAR = South African Rand Using the information above: a. Which foreign currencies are directly quoted? b. Which foreign currencies are indirectly...
Q10) Your firm has a British customer that is willing to place a $1 million order, but wants to pay in pounds instead of dollars. The spot exchange rate is S1.85 1.00 and the one-year forward rate is S1.90-£1.00. The lead time on the order is such that payment is due in one year. What is the fairest exchange rate to use? A) S1.8750- £1.00 B) S1.85 £1.00 C) $1.90-£1.00 D) none of the options Q11) Your firm is a...
15 Suppose that the current exchange rate is €1.00 - $1.60. The indirect quote from the US. perspective is A) €0.6250 - $1.00 3) €1.50 - $1.00 €1.00 - $1.60 Dy none of the options 19) The bid price A) is the price that a dealer stands ready to pay B) is the price that a dealer stands ready to sell at. is the price that the dealer has just paid for something, his historical cost of the most recent...
Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: a. Risk-free asset earning 11% per year. b. Risky asset with expected return of 26% per year and standard deviation of 34%. If you construct a portfolio with a standard deviation of 24%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place.) Expected return on portfolio I
Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: a. Risk-free asset earning 8% per year. b. Risky asset with expected return of 23% per year and standard deviation of 31%. If you construct a portfolio with a standard deviation of 22%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place.) Expected return on portfolio
Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: a. Risk-free asset earning 11% per year b. Risky asset with expected return of 35% per year and standard deviation of 42% If you construct a portfolio with a standard deviation of 30%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place.) Expected return on portfolio
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...
Assume the following premia: Strike $950 Call $120.405 93.809 84.470 71.802 51.873 Put $51.777 74.201 1000 1020 84.470 101.214 1050 1107 137.167 I 1) Suppose you invest in the S&P stock index for $1000, buy a 950-strike put, and sell a 1050- strike call. Draw a profit diagram for this position. What is the net option premium? 2) Here is a quote from an investment website about an investment strategy using options: One strategy investors apply is a "synthetic stock."...
I need help with problem 3 only, please
show all the calculations with details, don't just list numbers or
put them on a table using excel. I need to understand how did you
get each thing. Thanks
HUBE 466-566-P12020(2) - Compatibility Mode 18109361685 0 - 0 X File Home Insert Draw Design Layout References Mailings Review View Help Tell me what you want to do Share Comments .T .XIIII.1.IIII.2. IIII.3. III.4IIIII.5. III.6''T'.7 Problem 4. (3 points) A U.S. investor has...
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