1. Structured products are a pre-packaged investment strategy where the pay-out or return of the investment is often linked to the performance of an underlying assets. It is becoming increasingly popular with investors as they provide access to a market that can be tailor-made to suit the demands of investors. Furthermore, the level of derivative knowledge is more widespread among investors who are now more comfortable investing in a non-traditional asset class. a. Differentiate TWO (2) styles of options that can be exercised. (4 marks) b. Classify FIVE (5) risks associated with structured products. (10 marks) C. The information is given. On October 6, 2020, Mr Aljawa bought 10 contracts for Tesla contracts, with strike price of USD30, expiring in January, 2021, at USDO.35 per share. He needs to pay a typical commission of USD9.95 per trade plus USD0.75 per contract. Tesla rises to USD33 by December, so Mr Aljawa decided to sell his calls to lock in his profits, with the calls trading at USD3.20 per share, with USD0.20 being the remaining time value. You are required to compute; i. Total buying cost for the 10 calls contracts. (6 marks) Page 3 of 9 BFP3103 INVESTMENT PLANNING AND ANALYSIS / FE / S01 ii. Net profit of the contracts. (3 marks) iii. Rate of return for 2 months. (3 marks) (Total: 26 marks)