Question: please do it in 10 minutes will upvote 3. Answer both parts of this question. (a) When would a put option be used and explain

please do it in 10 minutes will upvote 3. Answer

please do it in 10 minutes will upvote

3. Answer both parts of this question. (a) When would a put option be used and explain if it would be exercised at expiry if S >X, where S is the spot price of the underlying asset and X is the strike price of the option? (10 marks) (b) Discuss three reasons why the treasurer of a company might not hedge the company's exposure to a particular risk and point out which is the main argument in favour of hedging? (10 marks) (Total: 20 marks)

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