Question

4. Describe the motivations of investors for utilizing options. 5. Design a use of options combination...

4. Describe the motivations of investors for utilizing options.

5. Design a use of options combination strategies, such as spreads and straddles, to address a hedging exposure you develop. Select the best solution you think would address the exposure.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

4. Motivation for investors to utilise options would be-

A. Hedging of the risk of their portfolio

B. Making excess money from taking little risks and having excessive leverage

C. It will only expose the option holder to a right not obligation.

D. The loss on buying of the option is always limited.

5. I would be using a covered call option which will be holding the underlying asset in the portfolio and selling the call option because I will be expecting little upside movement or no outside movement, so I'll be selling out of the money call option and if the price of share is constant, i will be making money on both my underlying assets as well as the value of the premium which I have got on the selling of the call options

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Explain the basic characteristics of options markets and individual options contracts. 2. Analyze how investors...
1. Explain the basic characteristics of options markets and individual options contracts. 2. Analyze how investors can make (or lose) money from put and call options by creating an exposure and hedging it with those tools (quantify). 3. Identify techniques that can be used for hedging. 4. Describe the motivations of investors for utilizing options. 5. Design a use of options combination strategies, such as spreads and straddles, to address a hedging exposure you develop. Select the best solution you...
2. Describe some ways that you personally use information technologies differently than you did just a...
2. Describe some ways that you personally use information technologies differently than you did just a few years ago. 3. Some organizations purposefully select a CIO that has strong business management backgrounds, not just technical experience. Under what organizational circumstances do you think this might be an effective choice? 4. Describe a new business for which you think a "virtual organization"—which has no physical office or headquarters—could be an effective design. What are some ways that the organization could use...
1. Identify and describe a great manager. What makes him or her stand out from the...
1. Identify and describe a great manager. What makes him or her stand out from the crowd? 2. Have you ever seen or worked for an ineffective manager? Describe the causes and the consequences of the ineffectiveness. 3. Describe in as much detail as possible how the Internet and globalization affect any company today. 4. Name a great organization. How do you think management contributes to making it great? Identify different functions and show how they are related. 5. Name...
Project 1 Design, develop and document a risk management plan related to: the reduction of accidents,...
Project 1 Design, develop and document a risk management plan related to: the reduction of accidents, illness or incidents relating to worker or general public safety the prevention of operational discontinuity the need for new or innovative improvement/ changes in processes or procedures (and the associated risks) environmental impact issues—including resource use and management You might choose another risk area relevant to the organisation for which you work. If you do you will need to describe the organisation and the...
You are a researcher working for an educational research firm. Your firm was asked to conduct...
You are a researcher working for an educational research firm. Your firm was asked to conduct a satisfaction survey among the parents of students attending the School District public schools. Your boss has asked you to develop a sampling design for this survey. For this survey, you are asked to select a representative sample of parents. When you answer the questions, keep the following in mind: Assume that you have unlimited authority to access all the information you may need...
DESCRIPTION Please choose one of the following options (ONLY ONE): 1) Select one TV commercial break...
DESCRIPTION Please choose one of the following options (ONLY ONE): 1) Select one TV commercial break of your prime-time favorite show and analyze at least 5 spots. Describe your household’s target groups reached by these spots, and please share your thoughts about their effectiveness.   2) [Best option for participants that do not watch traditional linear TV at all] – Select at least 5 ads from at least 3 different channels (Social Media, metro station, online newspaper, radio, Spotify…) that impacted...
You are a psychologist who is interested in studying the effects of media coverage of thin...
You are a psychologist who is interested in studying the effects of media coverage of thin models on the development of eating disorders. Specifically, you want to determine if viewing media coverage of really thin models is related to the likelihood of being diagnosed with an eating disorder. 1. state your hypothesis 2. Would you use an experiment or correlational design to test your hypothesis? Why? 3.If you conducted an experiment, the independent variable would be 4.If you conducted an...
Assume you are an HR specialist and have been tasked with conducting a job analysis. The...
Assume you are an HR specialist and have been tasked with conducting a job analysis. The purpose of this assignment is to provide you with insights into the processes associated with job analysis. * Complete steps 1-5* Step 1: Select a job in which you have familiarity (not one you have had before). Step 2: Select a Job Analysis technique and explain why you have chosen that method (i.e., which job analysis technique will help you learn more about the...
In the lab you are given 4 bottles, each containing about 5 grams of finely powdered...
In the lab you are given 4 bottles, each containing about 5 grams of finely powdered white substance. Located near the bottles are four lables which indicate that each bottle contains a high purity substance. One bottle contains glucose ( C6H12O6) another bottle sodium chloride (NaCl), another aluminum oxide (Al2O3), and another zinc sulfate (ZnSO4). Assume that these labels belong to the bottles and that each bottle conatins a single substance. Describe the tests that you could conduct to determine...
11-37. Message Strategies: Rejecting Suggestions and Proposals [LO-5] Walter Joss is one of the best employees...
11-37. Message Strategies: Rejecting Suggestions and Proposals [LO-5] Walter Joss is one of the best employees in your department, a smart and hard worker with a keen mind for business. His upbeat attitude has helped the entire department get through some recent rough times, and on a personal level, his wise counsel helped you grow into a leadership role when you were promoted to marketing manager several years ago.You generally welcome Joss’s input on the department’s operations, and you have...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT