You are holding call options on a stock. The stock’s beta is 0.76, and you are concerned that the stock market is about to fall. The stock is currently selling for $16 and you hold 1 million options on the stock (i. e., you hold 10,000 contracts for 100 shares each). The option delta is 0.80. How much of the market-index portfolio must you buy or sell to hedge your market exposure?
Answers: 3
Business, 22.06.2019 01:50
Which value describes the desire to be one’s own boss? a. autonomy b. status c. security d. entrepreneurship
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Business, 22.06.2019 20:00
Which of the following statements is true of the balanced-scorecard? a. it is a more or less a one-dimensional metric of measuring competitive advantages of a firm. b. it is one of the traditional approaches of measuring firm performance. c. its primary focus is to base a firm's strategic goals entirely on external performance dimensions. d. it attempts to provide a holistic perspective on firm performance.
Answers: 1
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Beachballs, inc., expects abnormally high earnings for the next three years due to the forecast of unusually hot summers. after the 3-year period, their growth will level off to its normal rate of 6%. dividends and earnings are expected to grow at 20% for years 1 and 2 and 15% in year 3. the last dividend paid was $1.00. if an investor requires a 10% return on beachballs, the price she is willing to pay for the stock is closest to:
Answers: 3
You are holding call options on a stock. The stock’s beta is 0.76, and you are concerned that the st...
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