Differentiate between implied and historical volatility, Risk Management

Assignment Help:

Question 1:

(a) What are the distinct types of assets under which derivatives can be based upon?

(b) Give at least 5 risks that justify the existence of derivatives? Endorse your answer using appropriate examples.

(c) Distinguish between futures and forwards.

Question 2:

(a) Mathematically derive the following positions:

i. Long position on a call option
ii. Short position on a put option

(b) Differentiate between implied volatility and historical volatility.

(c) Why options are considered as leveraged instruments? Explain fully with a proper example.


Related Discussions:- Differentiate between implied and historical volatility

Principles of risk communication, Principles of Risk Communication Kno...

Principles of Risk Communication Know  the  Audience In formulating risk communication messages, the audience should be analyzed to understand  their motivations and opini

Fixed income risk management, Fixed Income Risk Management You are a...

Fixed Income Risk Management You are asked in this assignment to insure the value of a bond portfolio during the (in hindsight) turbulent 8-month (or 245-day) period from 1

Decision tree project, You work for a company that sells expensive equipmen...

You work for a company that sells expensive equipment to other companies. The marketing director has closed on a substantial sale (for your company) but the customer has requested

Risk measure, The investment philosophy of Claire can be reflected from her...

The investment philosophy of Claire can be reflected from her comments “I will be satisfied if I just don’t lose money in my portfolio. I am more afraid of losing money than I am

Risk ratios, what are the computations of risk ratios?

what are the computations of risk ratios?

Requirement of relevant control of iso, Question: For each of the situa...

Question: For each of the situations below:- (a) Mention most relevant clause of ISO 27001:2005 (b) Whether the practice followed in the organization is appropriate and i

Evaluate risk management models, Evaluate risk management models • ERM a...

Evaluate risk management models • ERM approach • ISO31000:2009 • M_O_R Framework • GRC Capability Model

Report of the audit committee , Determine any qualitative factors or inform...

Determine any qualitative factors or information in the annual reports and accounts for Home Retail Group plc for 2011, containing the report if the audit committee, that you as th

Historical simulation approach, How can I calculate 10-day 99% VaR for port...

How can I calculate 10-day 99% VaR for portfolio comprising two banks by using the Historical Simulation Approach ?

Disaster risk management plan, The sustainability of coastal tourism destin...

The sustainability of coastal tourism destinations depends partly on their ability to adapt planning and management practices to the impacts of climate change and also to increase

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd