Questions from Business Statistics

Q: Using an example, compare and contrast physical delivery and cash settlement

Using an example, compare and contrast physical delivery and cash settlement.

Q: Assume that you have an opportunity to visit a civilization in outer

Assume that you have an opportunity to visit a civilization in outer space. Its society is at roughly the same stage of development as the U.S. society is now. Its economic system is virtually identic...

Q: Contrast dollar return and percentage return. Be sure to identify which

Contrast dollar return and percentage return. Be sure to identify which return is more useful when comparing investments.

Q: A short stock can be protected by selling a put. Determine

A short stock can be protected by selling a put. Determine the profit equations for this position and identify the breakeven stock price at expiration and maximum and minimum profits.

Q: An option dealer needs to finance the purchase of a security and

An option dealer needs to finance the purchase of a security and holds an inventory of U.S. Treasury bills. Explain how the dealer can use the repo market for financing the security purchase?

Q: Suppose you buy a stock index futures contract at the opening price

Suppose you buy a stock index futures contract at the opening price of 452.25 on July 1. The multiplier on the contract is 500, so the price is $500 452 25 $226,125 You hold the position until selling...

Q: Compare and contrast options and forward contracts.

Compare and contrast options and forward contracts.

Q: All derivatives are based on the random performance of something. Identify

All derivatives are based on the random performance of something. Identify and discuss this “something.

Q: What contract would two parties utilize if they agreed to exchange cash

What contract would two parties utilize if they agreed to exchange cash flows? How might this transaction proceed?

Q: Assume that you are faced with an opportunity made up of three

Assume that you are faced with an opportunity made up of three equally likely outcomes. If the first outcome occurs, you receive $10. If the second outcome occurs, you receive no money. If the third o...