FIN 567 Enthusiastic Study / snaptutorial.com

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FIN 567 Enthusiastic Study--snaptutorial.com
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FIN 567 Enthusiastic Study--snaptutorial.com
FIN 567 Class Project For more classes
visit www.snaptutorial.com   Assume that you have
500,000 to invest in equities and want to
establish a new portfolio that includes ten (10)
stocks to be selected from the Dow Jones
Industrial Average of 30 companies.  It is also
desired to start with nearly equal dollar values
of each issue.  Use current market prices to
compute the number of shares required.   You are
bullish on the markets in the long-term however,
you have read analyst predictions that over the
next 18 months the market will likely stay flat
with some downside potential. 
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FIN 567 Enthusiastic Study--snaptutorial.com
FIN 567 Final Exam For more classes
visit www.snaptutorial.com   Question 1.     
Question         (TCO E) A stock sells for 60
and the risk-free rate of interest is 10. A call
and a put on this stock expire in one year and
both options have an exercise price of 55. How
would you trade to create a synthetic call
option? If the put sells for 2, how much is the
call option worth? (Assume annual
compounding.)   Question 2.      Question
        (TCO H) Explain how a put price varies
with interest rates. Does the relationship vary
for European and American puts? Explain.
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FIN 567 Enthusiastic Study--snaptutorial.com
FIN 567 Midterm For more classes
visit www.snaptutorial.com   Question 1.     
Question         (TCO A) An order that closes an
existing position is called a(n)
______.   Question 2.      Question         (TCO
A) Which of the following is not a characteristic
of a short call position?   Question 3.     
Question         (TCO E) The owner of a call
that expires in the money (ignore cash settlement
options) ________.  
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FIN 567 Enthusiastic Study--snaptutorial.com