Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Explain Yield Enhancement?
Expert Solution
Step 1
A "yield enhancement technique" is an investment approach that includes purchasing options at the best and foot of a given extend, with strike costs.
Step 2
In case, amid the alternative time, the cost of the fundamental resource or index (most usually the S&P 500) resides inside that run, at that point the alternatives terminate and the holder is entitled to an option premium.
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