Question: How do I intrepret CVaR? (6 marks) Hedging using Options: ( 12 marks) On any day between Monday, 14th March 2022 and the assessment due
- How do I intrepret CVaR? (6 marks)
- Hedging using Options: (12 marks)
- On any day between Monday, 14th March 2022 and the assessment due date (Sunday, 17th March 2022), how will you use the option contract to hedge Apple (AAPL). You need to determine and explain which option you want to use (i.e., specify whether it is a call or put, when the expiration date is, appropriate strike price, whether you should go long or short, number of contracts, etc.). Provide justification for your decision. (7 marks)
Note: If you are not able to backdate historical price for the option, feel free to use the available price whenever you start drafting the answer to this question. For example, if your start to look at this question on 14th April 2022, and cannot find the historical option price on Thursday, 31st March 2022, then it is fine to use the option price on 14th April 2022.
- Discuss when you will exercise your option and its potential payoff. (5 marks)
Pls help with this qn, thx!
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