Hangout Finance Assingment Help With Solution
Q1. Is a short position of a call option (= writing a call) identical to a long position of a put option (= buying a put)? Please explain.
Q2. Explain the similarities and the differences between a forward contract and a futures contract.
Q3. A company enters into long futures contracts to buy 4,000 bushels of wheat for $3.00 per bushel. The initial margin is $0.60 per bushel. The maintenance margin is $1,000.
a. If futures price becomes $3.30 per bushel (10% increase), calculate the cumulative gain.
b. Calculate the rate of return.
b. What futures price change will trigger a margin call?
Q4. A fund manager has a portfolio worth $20 million with a beta of 1.3. The manager is concerned about the performance of the market over the next two months and plans to use three-month futures contracts on the S&P 500 to hedge the risk. The current index level is 2,000 and one futures contract is on 250 times the index (i.e., the index multiplier is 250). The risk-free rate is 3.0% per annum and assume 0% dividend yield for simplicity. The current three-month futures price is $2,100.
a. What position should the fund manager take to hedge exposure to the market over the next two months? In other words, how many futures contracts does the manager have to buy or sell? Specify whether it’s a long (=buy) or short (=sell) position.
b. Calculate the effect of your strategy on the fund manager’s returns if the index in two months is 1900, 2000, 2100, 2200 and 2300. Assume in 2 months, the one-month futures price will be 0.25% higher than the index level. For example, if the index becomes 2000 two months from now, the index futures price will be 1.0025*2000 = 2005.00.
c. Calculate the standard deviation of stock portfolio values and that of total portfolio (stock + futures) values. Compare the two standard deviations.
d. In 2 months, are the total values (hedged values = stock portfolio plus futures position) always greater than the stock (=unhedged) values, regardless of the index value? If not, does it mean the hedge was unsuccessful? Explain.
How it Works
How It works ?
Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention product code mentioned in end of every Q&A Page. You can also send us your details through our email id email@example.com with product code in the email body. Product code is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.
Step 2:- While filling submit your quotes form please fill all details like deadline date, expected budget, topic , your comments in addition to product code . The date is asked to provide deadline.
Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id firstname.lastname@example.org and email@example.com must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.
Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.
Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.
Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.
Features for Assignment Help
We believe in providing no plagiarism work to the students. All are our works are unique and we provide Free Plagiarism report too on requests.
We believe in providing perfect, relevant and 100% accurate solutions to the student as per questions asked. All our experts are perfect in providing that so as to give unique experience to the students.
We are the only service providers boasting of providing original, relevant and accurate solutions. Our three stage quality process help students to get perfect solutions.
All our works are kept as confidential as we respect the integrity and privacy of our clients.
- Physics Assignment Help
- Chemistry Assignment Help
- Engineering Assignment Help
- Psychology Assignment Help
- Online exam Help
- Marketing Assignment Help
- Arts Assignment Help
- Sociology Assignment Help
- Project Management Assignment
- Case Study Help
- Nursing Assignment Help
- Research Assignment Help
- Operations Management Assignment help
- Accounting Assignment Help
- Biology Assignment Help
- Mathematics Assignment Help
- English Assignment Help
- Business Plan Help
- Essay Writing Help
- Human Resource Assignment Help
- Accounting Homework Help
- Computer Science Assignment Help
- Finance Assignment Help
- Economics Assignment Help
- Statistics Homework Help
- Management Assignment Help
- Strategy Management Assignment Help
- Auditing Assignment Help
- Information Management Assignment Help
- Online Assignment Writing help
- Best Assignment Help
- Humanities Assignment help
- Corporate Finance Assignment help
- Financial Management Assignment Help
- Supply Chain Management Assignment Help
- Taxation Homework Help
- MBA operations management assignment help
- History Assignment help
- Geography Assignment Help
- Anthropology Assignment help
- Archaeology Assignment help
- Counselling assignment help
- Criminology assignment help
- Linguistics Assignment Help
- Architecture Assignment Help
- Philosophy Assignment Help
- Physics and Astronomy Assignment Help
- Physiotherapy Assignment Help
- Politics Assignment Help
Hint: To answer part b, replicate closely the textbook example in pages 65-67. Or review week 1 Excel file as we will be discussing a very similar example. In other words, you need to create a spreadsheet similar to Table 3.4.
From the syllabus addendum
Homework: Each student must submit to “Assignments” in BB. The questions will be announced in the Monday email announcement. You must submit 1 Excel file (no Word file please) showing all the calculations and highlight your final answer. Cover sheet is not necessary.
If you do one of the following, you will receive 0 points for your homework submission.
a. 2 or more students submitting virtually identical Excel files. You may work in groups but each student must prepare and submit his own Excel file. Do not share or copy answers.
b. Typing in numeric answers. For example, if the question asks “what is 123+789?” then you should input in Excel as “=123+789” instead of “912.” Your Excel may display the cell as “912” but when I click it, I need to see your Excel formula “=123+789.”
c. Copying the solutions from previous year homework. Please note that I change all the questions slightly every year.
If you need help, feel free to ask for help in Hangouts chat. I won’t tell you whether your answer is right or wrong. But I’ll give you hints. When asking for help, try to be as specific as possible so that I can give you a better help.
Product Code :Fin305
To get answer for this question, kindly click here (Note: Don’t forget to write the product code in comment section)
You can also email us at firstname.lastname@example.org but please mentioned product code in the mail body while sending emails.You can browse more questions to get answer in our Q&A sections here.