Econ5007
经济复习题代写 1.What is the difference between a ‘covered’ versus a ‘naked’ option position?2.Draw a net payoff diagram for a long call option.
Week 10 review questions 经济复习题代写
1.What is the difference between a ‘covered’ versus a ‘naked’ option position?
2.Draw a net payoff diagram for a long call option.
3.On the diagram you drew in Q2, assume the following information: X=5, S=10, c=2. Show the respective information including the payoff on the diagram.
4.Draw a net payoff diagram for a short put option.
5.On the diagram you drew in Q4, assume the following information: X=10, S=7, p=1. Show the respective information on the diagram including the payoff.
6.Can an option with zero intrinsic value have a positive price? Explain.
7.What are the major differences between an equity warrant and an option contract?
8.Outline the steps in deriving/proving the ‘bounds’ on option prices relative to their underlying asset prices.
9.Why is a call option never worth more than the value of its underlying asset?
10.Define the put call parity relationship and prove an arbitrage opportunity exists if the equality of the relationship is violated.
11.Explain the payoff in different states of the world to bond holders under the Modigliani-Miller theorem.
12.Explain the obligation on the writer of a put option over a futures contract upon exercise.
13.Check the calculation of the net effective interest rate in the table provided on p502 of Bailey when the market rate of interest is 7%.
Week 13 review questions 经济复习题代写
1.What is the difference between a swap and a forward contract?
2.Describe the sequence of payments for a 5 year, 6 monthly plain vanilla interest rate swap where A pays to B GBP 10%, and receives USD9% on a notional principal of GBP10m
3.Using the information in Q2 what is the equivalent expression of the swap in forward contracts? Does A have a short or long position?
4.How is a total return swap different from a credit default swap?
5.If B has an absolute advantage over A in fixed and floating rate debt markets, is a mutually beneficial swap possible? Explain.
6.Examine the payoff table on p425 of Bailey. If the swap payment was renegotiated such that A paid 9.5%, how would other payments and the payoffs be impacted?
7.Above what required payment for A under the swap (p425) would the swap cease to be feasible? Why?
8.Examine the payoff table on p427 for a foreign exchange swap. Why is the intermediary exposed to currency risk? (How is it funding its required payments?)
9.How can the intermediary hedge its risk? Provide an outline of the trade it would need to make.
10.Outline 2 major risks with swap contracts. Discuss whether and how these risks could be correlated.
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