What is a REIT What are the advantages and disadvantages of REITs List and Describe the different types of REITS What is an OPTION Differentiate between a PUT and a CALL OPTION List and Describe the different types of OPTIONS What is a REPO What are the advantages and disadvantages of REPOS List and Describe the different types of REPOS What is the formula for calculating REPO RATE Define (a) Market Risk (b) Interest Rate Risk (c) Commodity Risk (d) Currency Risk

Q: Critically explain with examples the concept of futures and the differences between options and…

A: Futures in a type of derivative product in which there is a contract that is agreed in between two…

Q: Advantages of currency futures contracts relative to forward contracts include _     a. Higher…

A: A futures contract is a legal contract to purchase or sell an underlying asset or security at a…

Q: How is the call option price impacted by varying the risk free rate of interest? How is the call…

A: 1) Call option is the contract according to which the buyer of the option has the right but not the…

Q: What are the pros and cons of using options traded in the over-the-counter market and in an exchange…

A: Options can be defined as those contracts which allow an investor to purchase or sell a security on…

Q: define and explain convenience yield, and describe how it is incorporated into the futures pricing…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: What is the spread (i.e., difference) between futures price and spot price called? a) Convergence…

A: The futures price is an estimated price the investor expected in the future.  The spot price is a…

Q: What impact does each of the followingparameters have on the value of a call option?(3) Option’s…

A: It is a contract to purchase a financial asset from one party and sell it to another party on an…

Q: Fama and French three factor model is based on market risk premium factor and two other factors. A)…

A: “Since you have posted multiple questions, we will solve first three subparts for you. To get…

Q: Define the terms, or give short explanations.         -futures contract/option -hedge -hedger…

A: A derivative is a financial contract whose value is derived from the underlying asset, which could…

Q: Why is writing deep-in-the-money currency options tantamount to short-term financing?

A: A deep in the money option is an options contract where the strike price of the option is…

Q: Goodyear, a U.S. firm, sells tires to Airbus UK, and will receive payment of £1,000,000 in one year.…

A: With globalisation and increasing demand of services and products, firms operates businesses…

Q: What advantage does hedging using money market rates have over using interest rate futures?

A: However, there are also some drawbacks to consider:Potential Lower Returns: Interest earned on money…

Q: Explain what is meant by forward contracts and futures using examples. List the main advantages /…

A: An option offers the holder of it the right, and not the responsibility, to buy or to sell an asset…

Q: Discuss how equity can be viewed as an option. Who has theoption, and what decision can they make?

A: If an enterprise cannot satisfy its contractual obligation of debt, it is in default for every…

Q: What is margin requirement (for futures)?

A: Solution:- A Margin Requirement is the share of marginable securities that an investor should pay…

Q: What impact does each of the followingparameters have on the value of a call option?(2) Strike price

A: A call option is a derivative instrument and thus,  it derives its value from some underlying asset.…

Q: Interest can be defined as the price of credit and also as a rate of return Question 21…

A: Statement : Interest can be defined as the price of credit and also as a rate of return.Answer:…

Q: What is the effect on interest of an interest rate swap?

A: Derivatives: Derivatives are some financial instruments which are meant for managing risk and…

Q: Which of the following instruments has the highest cost? Seleccione una: a. Fed Funds b. Commercial…

A: The assets that can be traded at a specific rate and act as capital are called financial…

Q: Market risks are: B. Interest rate risk, foreign exchange risk, portfolio concentration, commodity…

A: Market risk are associated with ups and down of market. It referes to risk of loss aries from the…

Q: Which one is the least risky option? A. Bonds B. Shares C. Treasury Bills D. Trading

A: Trading involves the buying and selling of financial instruments, such as stocks, bonds, currencies,…

Q: Demonstrate how interest rate and currency swaps are constructed and discuss the comparative…

A: Two parties can exchange cash flows based on various interest rates or currencies using financial…