Uses of options include Question 4 options: Possibility of hedging Limiting exposure to risk Profitability all...

Uses of options include

Question 4 options:

Possibility of hedging

Limiting exposure to risk

Profitability

all of the above are uses of options

A and C are uses, but B is not

Expert Solution

Options are the financial instrument that are derivatives based on the value of underlying securities. Option includ the possibility of hedging, limiting exposure of risk and profitability.

Answer = All of the above are uses of options.

jeff jeffy answered 2 years ago

Question 18 Give one argument in favor of hedging transaction exposure and one argument against hedging...

Question 18 Give one argument in favor of hedging transaction exposure and one argument against hedging transaction exposure.

how is risk affected by using different combinations for hedging, neutrality, exposure positions, etc?

Why should banks be concerned about their level of profitability and exposure to risk?

Why should banks be concerned about their level of profitability and exposure to risk? Compare suncorp profitability with peer group mainly Return on Assets and Return on Equity? How do you see the level of suncorp bank(ausralia) profitability compared to its peer group?

Contingent exposure can best be hedged with A) money market hedging. B) options. C) futures. D)...

Contingent exposure can best be hedged with A) money market hedging. B) options. C) futures. D) all of the options and why?

1.One advantage of hedging with options is that there is limited down-side risk, but favorable price...

1.One advantage of hedging with options is that there is limited down-side risk, but favorable price changes still benefit the hedger. (True or False) 2.What happens to the intrinsic value of a call option that is "in the money" if the price of the underlying futures contract increases. The intrinsic value increases. The intrinsic value decreases. The intrinsic value stays at zero.

The phases of the business cycle include (select all that apply): Question 25 options: Inflation. Expansion....

The phases of the business cycle include (select all that apply): Question 25 options: Inflation. Expansion. Contraction. Deflation.

Methods used to reduce asymmetric information include (choose all that apply): Question 42 options: Signaling. Rationalizing....

Methods used to reduce asymmetric information include (choose all that apply): Question 42 options: Signaling. Rationalizing. Unbounding. Screening.

Explain how options prices are derived? What are ALL the factors that affect options prices? Include...

Explain how options prices are derived? What are ALL the factors that affect options prices? Include an example of options contracts of a company and compare them with options of one competitor.

Calculations Involving a Limiting Reactant Question 16. This question has multiple parts. Work all the parts...

Calculations Involving a Limiting Reactant Question 16. This question has multiple parts. Work all the parts to get the most points. a. "Smelling salts," which are used to revive someone who has fainted, typically contain ammonium carbonate, (NH4)2CO3. Ammonium carbonate decomposes readily to form ammonia, carbon dioxide, and water. The strong odor of the ammonia usually restores consciousness in the person who has fainted. The unbalanced equation is (NH4)2CO3(s) → NH3(g) + CO2(g) + H2O(g) Calculate the mass of ammonia...

All of the following are reasons why a risk exposure should be monitored more frequently EXCEPT...

All of the following are reasons why a risk exposure should be monitored more frequently EXCEPT the risk exposure materiality is rated as high. the underlying asset's volatility increases. management's risk tolerance increases. the risk exposure has increased likelihood of losses. An organization's cost of risk from losses is the break-even point between the costs of insurance and the costs of uninsured losses for an organization. the cost of all insurance and related administrative costs. the total of all costs...

Question