Description
Learning Outcomes:
After completion of Assignment three students will be able to understand the following
CLO4:Demonstrate the valuation methods used for the valuation of the common forms of debt, equity, property, and derivative securities.
CLO5:Illustrate asset models of a stochastic nature that are appropriate to the management of liabilities.
Assignment Questions (5 marks each):
- Should an investor who thinks interest rates are going down seek low or high coupon rate bonds? Relate your answer to duration and price sensitivity.
- Why do investors tend to pay a smaller premium for a warrant as the price of the stock goes up?
- Assume you wish to control the price movement of
100 shares of stock. You may buy 100 shares of stock directly or purchase a call option on the 100 shares.
Which strategy is likely to expose you to the larger potential dollar amount of loss? Which strategy is likely to expose you to the larger potential percent loss on your investment? - How can using the financial futures markets for interest rates and foreign exchange help financial managers through hedging? Briefly explain and give one example of each.
- “Please prepare an 8-slide PowerPoint presentation, include pictures, and place the full presentation content in a Word document.”
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Learning Outcomes:
After completion of Assignment three students will be able to understand the
following
CLO4:Demonstrate the valuation methods used for the
valuation of the common forms of debt, equity, property,
and derivative securities.
CLO5:Illustrate asset models of a stochastic nature that
are appropriate to the management of liabilities.
Assignment Questions (5 marks each):
1. Should an investor who thinks interest rates are going
down seek low or high coupon rate bonds? Relate
your answer to duration and price sensitivity.
2. Why do investors tend to pay a smaller premium for a
warrant as the price of the stock goes up?
3. Assume you wish to control the price movement of
100 shares of stock. You may buy 100 shares of stock
directly or purchase a call option on the 100 shares.
Which strategy is likely to expose you to the larger
potential dollar amount of loss? Which strategy is
likely to expose you to the larger potential percent loss
on your investment?
4. How can using the financial futures markets for
interest rates and foreign exchange help financial
managers through hedging? Briefly explain and give
one example of each.• THE ASSIGNMENT MUST BE SUBMITTED ON
BLACKBOARD (WORD FORMAT ONLY VIA
ALLOCATED FOLDEK.
• ASSIGNMENTS SUBMITTED THROUGH EMAIL
WILL NOT BE ACCEPTED.
• STUDENTS ARE ADVISED TO MAKE THEIR
WORK CLEAR AND WELL PRESENTED;
MARKS MAY BE REDUCED FOR POOR
PRESENTATION. THIS INCLUDES FILLING IN
YOUR INFORMATION ON THE COVER PAGE.
STUDENTS MUST MENTION QUESTION
NUMBERS CLEARLY IN THEIR ANSWER.
•
• LATE SUBMISSION WILL NOT BE ACCEPTED.
• Avoid plagiarism, the work should be in your own
words, copying from students or other resources
without proper referencing will result in ZERO marks.
No exceptions.
• All answers must be typed using Times New Roman
(size 12, double-spaced) font. No pictures containing
text will be accepted and will be considered
plagiarism).
• Submissions without this cover page will NOT be
accepted.
Purchase answer to see full
attachment
Learning Outcomes:
After completion of Assignment three students will be able to understand the
following
CLO4:Demonstrate the valuation methods used for the
valuation of the common forms of debt, equity, property,
and derivative securities.
CLO5:Illustrate asset models of a stochastic nature that
are appropriate to the management of liabilities.
Assignment Questions (5 marks each):
1. Should an investor who thinks interest rates are going
down seek low or high coupon rate bonds? Relate
your answer to duration and price sensitivity.
2. Why do investors tend to pay a smaller premium for a
warrant as the price of the stock goes up?
3. Assume you wish to control the price movement of
100 shares of stock. You may buy 100 shares of stock
directly or purchase a call option on the 100 shares.
Which strategy is likely to expose you to the larger
potential dollar amount of loss? Which strategy is
likely to expose you to the larger potential percent loss
on your investment?
4. How can using the financial futures markets for
interest rates and foreign exchange help financial
managers through hedging? Briefly explain and give
one example of each.• THE ASSIGNMENT MUST BE SUBMITTED ON
BLACKBOARD (WORD FORMAT ONLY VIA
ALLOCATED FOLDEK.
• ASSIGNMENTS SUBMITTED THROUGH EMAIL
WILL NOT BE ACCEPTED.
• STUDENTS ARE ADVISED TO MAKE THEIR
WORK CLEAR AND WELL PRESENTED;
MARKS MAY BE REDUCED FOR POOR
PRESENTATION. THIS INCLUDES FILLING IN
YOUR INFORMATION ON THE COVER PAGE.
STUDENTS MUST MENTION QUESTION
NUMBERS CLEARLY IN THEIR ANSWER.
•
• LATE SUBMISSION WILL NOT BE ACCEPTED.
• Avoid plagiarism, the work should be in your own
words, copying from students or other resources
without proper referencing will result in ZERO marks.
No exceptions.
• All answers must be typed using Times New Roman
(size 12, double-spaced) font. No pictures containing
text will be accepted and will be considered
plagiarism).
• Submissions without this cover page will NOT be
accepted.
Purchase answer to see full
attachment
