Questions from General Investment

Q: Name five variables that can affect the price of options, and

Name five variables that can affect the price of options, and briefly explain how each affects prices. How important are intrinsic value and time value to in-the money options? To out-of-the-money opt...

Q: What is a futures contract? Briefly explain how it is used

What is a futures contract? Briefly explain how it is used as an investment vehicle.

Q: The table below shows the dividend per share paid in 2007 and

The table below shows the dividend per share paid in 2007 and 2017 for three companies. For each company, estimate the compound annual dividend growth rate over this decade.

Q: What is the difference between physical commodities and financial futures? What

What is the difference between physical commodities and financial futures? What are their similarities?

Q: Describe a currency future and contrast it with an interest rate future

Describe a currency future and contrast it with an interest rate future. What is a stock index future, and how can it be used by investors?

Q: Discuss how stock index futures can be used for speculation and for

Discuss how stock index futures can be used for speculation and for hedging. What advantages are there to speculating with stock index futures rather than specific issues of common stock?

Q: What are futures options? Explain how they can be used by

What are futures options? Explain how they can be used by speculators. Why would an investor want to use an option on an interest rate futures contract rather than the futures contract itself?

Q: Discuss the difference between a cash market and a futures market.

Discuss the difference between a cash market and a futures market.

Q: What is the major source of return to commodities speculators? How

What is the major source of return to commodities speculators? How important is current income from dividends and interest?

Q: Why are both hedgers and speculators important to a futures market?

Why are both hedgers and speculators important to a futures market?