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2) Give two reasons why an investment strategy based on growth might under-perform or over-perform and investment strategy likely to be used by a value

2) Give two reasons why an investment strategy based on growth

might under-perform or over-perform and investment strategy

likely to be used by a value oriented investor.

a) Give two reasons why a futures contract would differ from a

forward contract.

b) Discuss how a long call position in a particular stock would

differ from a short put position in the same stock with the same

strike price and the same expiration date.

c) Explain why a call option on a specific stock with a specific

strike price and expiration date might be worth much more than

another call option on a different stock having the same stock

price, the same option strike price, and the same expiration date.

d) Explain what is meant by a protective put strategy when

holding a specific long stock position. How might the overall

outcome of this strategy differ from just holding a long position in

that stock. Consider the cases of either a higher close or a lower

close when the option expires.

e) What sort of market behavior might lead to a positive or a

negative outcome to an investor with a short straddle position.

Be specific about prices.

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