Question: 4. From the practical lecture: (a) What is a Snowball? Who is in the long position and who is in the short? (b) Briefly explain

4. From the practical lecture: (a) What is a Snowball? Who

4. From the practical lecture: (a) What is a Snowball? Who is in the long position and who is in the short? (b) Briefly explain what the holders of Snowball would get in the following two sce- narios (figure below). Call Level 100 % Price movement Strike level 2 Observation Date Call Level 100% Price movement Lun hum . Strike level 3 4 Observation date (c) Name two potential types of risk of Snowball, and how people hedge against these risks. 4. From the practical lecture: (a) What is a Snowball? Who is in the long position and who is in the short? (b) Briefly explain what the holders of Snowball would get in the following two sce- narios (figure below). Call Level 100 % Price movement Strike level 2 Observation Date Call Level 100% Price movement Lun hum . Strike level 3 4 Observation date (c) Name two potential types of risk of Snowball, and how people hedge against these risks

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