Question: What are the economic benefits that options provide
What are the economic benefits that options provide?
Answer to relevant QuestionsSuppose you want to make an investment that will be profitable if a company’s stock price falls. What are the pros and cons of buying a put option on the company’s stock versus short selling the stock? Draw payoff diagrams for each of the portfolios below (X = strike price). a. Buy a share of stock and short a call with X = $35 b. Buy a risk-free zero-coupon bond with a face value of $35 and sell a put with X = $35. c. ...a. A call option expires in three months and has X = $40. The underlying stock is worth $42 today. In three months, the stock may increase by $7 or decrease by $6. The risk-free rate is 2% per year. Use the binomial ...Distinguish between the four basic types of venture capital funds. Which type has emerged as the dominant organizational form? Why? Describe the recent levels of venture capital activity in Canada, Israel, China, India and India. What is the outlook for each of them?
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