Answer: 20 contracts
Explanation:
It should be noted that each OEX 600 Put contract will cover:
= 100 × 600
= $60,000 of stock
Therefore, to hedge $600,000 portfolio, ($600,000/$60,000) = 10 contracts will be needed.
Since the portfolio has a beta of 2, this means that:
=2 x 10 contracts
= 20 contracts will be needed.
Conduction is the process by which heat or electricity is transmitted through a substance when there is a difference of temperature or of electrical potential between adjoining regions. Convection is the movement caused within a fluid by the tendency of hotter and therefore less dense material to rise, and colder, denser material to sink under the influence of gravity, which consequently results in transfer of heat. Radiation is 1.) the emission of energy as electromagnetic waves or as moving subatomic particles, especially high-energy particles that cause ionization. 2.)<span>divergence out from a central point, in particular evolution from an ancestral animal or plant group into a variety of new forms.</span>
Answer:
As a result of the increase in the interest rate on euros, the euro's forward <u>PREMIUM</u> will <u>DECREASE</u> in order to maintain interest rate parity.
Explanation:
The forward exchange rate is the currency exchange rate at which a bank or other financial institution agrees to exchange one currency for another in a specific future date. The forward premium represents a situation where the forward exchange rate is higher than the actual exchange rate.
In this case, since the euro's interest rate will increase by 2%, then its premium will decrease (future expected value will also decrease) so that the interest rate parity remains stable.
Answer:
cuz why not,its bery taesty