Questions from Business Statistics

Q: What differences exist in the way prices are quoted in the foreign

What differences exist in the way prices are quoted in the foreign exchange futures market, the foreign exchange spot market, and the foreign exchange forward market?

Q: Add rows in Table 8.1 corresponding to losses on the

Add rows in Table 8.1 corresponding to losses on the underlying assets of (a) 2%, (b) 6%, (c) 14%, and (d) 18%.

Q: Explain carefully the difference between selling a call option and buying a

Explain carefully the difference between selling a call option and buying a put option.

Q: Under what circumstances are (a) a short hedge and (

Under what circumstances are (a) a short hedge and (b) a long hedge appropriate?

Q: What was the role of GNMA (Ginnie Mae) in the

What was the role of GNMA (Ginnie Mae) in the mortgage-backed securities market of the 1970s?

Q: Imagine you are the treasurer of a Japanese company exporting electronic equipment

Imagine you are the treasurer of a Japanese company exporting electronic equipment to the United States. Discuss how you would design a foreign exchange hedging strategy and the arguments you would us...

Q: An index is 1,200. The three-month risk

An index is 1,200. The three-month risk-free rate is 3% per annum and the dividend yield over the next three months is 1.2% per annum. The six-month risk-free rate is 3.5% per annum and the dividend y...

Q: What is a mezzanine tranche?

What is a mezzanine tranche?

Q: A U.S. investor writes five naked call option contracts

A U.S. investor writes five naked call option contracts. The option price is $3.50, the strike price is $60.00, and the stock price is $57.00. What is the initial margin requirement?

Q: Suppose that USD/sterling spot and forward exchange rates are as

Suppose that USD/sterling spot and forward exchange rates are as follows: What opportunities are open to an arbitrageur in the following situations? (a) A 180-day European call option to buy Â&p...