Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Management Expert

Attempt all the problems.

Section-A

problem1) Describe development and regulation of derivatives markets in India. Support your answer with exs.

problem2) How are prices determined in futures contract?  Who are the main players in Future market in India?

SECTION B

Case Study: Calipso Capital Consultants

Calipso Capital Management (CCC), the investment management firm with offices throughout Ohio, is headquartered in Cincinnati. CCC generally actively manages accounts for high-income individuals with assets of $500,000 or more. Peter Myers, managing director of CCC, thought increased interest of clients in security options required more than routine advice as he knew that many clients did not fully appreciate the risks and hedging aspects of buying and selling puts and calls. He had personally spent many hours describing the vocabulary and technical trading aspects of option vehicles to clients who found the area exciting but none the-less arcane.

                            EXHIBIT 1        
          Bio-Genetics Corp. Option Quotes    
STOCK PRICE: 162                    
                             CALLS                 PUTS
STRIKE                    
PRICE  APR     JULY     OCT     APR      JULY
140      23                
150      16       21        25         1          4
160       9        14        20         3          7
170       3         9         13         9         10
180       1         5          9                     20

Note: Blank spaces denote option not offered or not traded.

Janet Barnes joined the firm three months ago after spending one year in Dean Witter's training program in Cleveland. She received a broad training with emphasis in options and futures instruments. Myers though Barnes would be an important member of the firm in its dealings with clients interested in securities options.

The first task that Barnes faced was preparing an analysis of various strategies in the options of Bio-Genetics Corp., a company about which a young dentist in Berea had called. The dentist owned the stock and wanted to explore various strategies to either hedge or enhance his position.
Data provided in Exhibit 1 relate to key information on Bio-Genetics puts and calls. Bio-Genetics stock is currently at 162, pays no dividends, and has a beta of 1.3. The volatility of the stock is estimated at 30 percent. The rate on two-month Treasury bills is 6 percent.

Case problems:

1. Which options are in-the-money? Which are out-of-the-money?                 

2. find out margin requirement for a short position in the Apr/140 call option.     

3. Compute commission for the purchase three July/170 puts.               

4. Why are investors willing to pay1 for the Apr/1S0 call and also the Apr/150 put, which is closer to the current market price?                            

5. Suppose April options expire in one month. Are the Aprill160 calls fairly valued? Describe.                                              

6. Suppose client is holding 100 shares of Bio-Genetics common long at 162.

Advise client on the relative advantages and disadvantages of selling a call against this position using:

(a) Apr/170 versus

(b) July/150 calls

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M93146

Have any Question? 


Related Questions in Business Management

Answer the questions Answer the questions:   

Answer the questions:    When Facebook went public, its disclosure document said: As a board member and officer, Mr. Zuckerberg owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonab ...

Consider an economy with a large number of potential online

Consider an economy with a large number of potential online game providers. The provider lacks the funds to start their projects. There is an equal number of investors who have the funds but no desire to create online ga ...

Project charter for final projectfor this you will develop

Project Charter for Final Project For this you will develop a project plan for any product design, development, or service rendering. In this assignment you will design one of the initial deliverables of a project, a pro ...

Please show the steps on how it is solvedquestion consider

Please show the steps on how it is solved. Question: Consider a competitive firm with the following profit function Π = R-C = PQ-wL-rK where P = Price of the output Q = Output L = Labor input K = Capital input w = wage r ...

Writenbspa summary in a minimum of 1400 words in which you

Write  a summary in a minimum of 1,400 words in which you discuss the roles of law and courts in today's business environment. Include the following:  Explain the origins of the U.S. judicial system and how the judicial ...

Assignmentchoose two of the major labor legislation laws

Assignment Choose two of the major labor legislation laws enacted in the 20th century and respond to the following questions for each: What were the major circumstances that led to the passing of the legislation? How wer ...

Explain the concept of multi cause versus single cause in

Explain the concept of multi cause versus single cause in regards to an accident. Explain in detail how this concept is relative to an aviation safety program.

Assignmentif a company grows too fast it can find itself

Assignment If a company grows too fast, it can find itself without access to the resources it needs to meet its obligations. If it grows too slowly, it may find itself missing strategic as well as tactical opportunities. ...

Assume the role of a chilean global wine expert seeking to

Assume the role of a Chilean global wine expert seeking to enter the Chinese market with a new wine brand. What are  five (5) key steps  that you would take before shipping the 1st bottle or container of wine to Chile? A ...

The theory of medical dominance suggests that doctors have

The theory of medical dominance suggests that doctors have a key authoritative role in the health care profession. Considering that this is a way of thinking that has been in existence since the early part of the twentie ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro