7. (6 points) As the Chief investment Otficer of Big Time Returns Inc, you need to determine the weighted probability of returns of the firm's $42 million allocation to crypto investments. (\$how calculations for each question) Below is a probability toble of potential returns for the firm's crypto investment: A. Calculate the weighted probability of returns (show the colculotions). The answer should be both a percentage refurn and a dollar amount either gained or lost. B. Based on the above table, what is the maximum dollor amount the portfolio could return? c. Based on the above toble, whot is largest dollor loss the portfolio could experience? 8. (6 points) You are an actuarial for a defined benefit plan. In a given year, interest rates fall by 425 basis points (4.25*) and equity prices are flat. From an actuarial perspective, discuss the effect of this scenario on a defined benefit pension plan that is 60% invested in equities and 40% invested in bands. 9. (s points) Options are known to be a wasting asset. A. Why are options considered to be a wasting asset? B. As a wasting asset, which of the "Greeks" derives the rate of change of the option's premium volue? C. If you are long an option is the value of this "Greek" usually positive or negotive and why? 3 Ipace Extra Credit (3 points) A. A calf option delta is 0.57 . What is the delto of a put with the same expiration and strike price? B. A call option deita is 0.61 . What is the probability your coll option will expire in-the-money? 7. (6 points) As the Chief investment Otficer of Big Time Returns Inc, you need to determine the weighted probability of returns of the firm's $42 million allocation to crypto investments. (\$how calculations for each question) Below is a probability toble of potential returns for the firm's crypto investment: A. Calculate the weighted probability of returns (show the colculotions). The answer should be both a percentage refurn and a dollar amount either gained or lost. B. Based on the above table, what is the maximum dollor amount the portfolio could return? c. Based on the above toble, whot is largest dollor loss the portfolio could experience? 8. (6 points) You are an actuarial for a defined benefit plan. In a given year, interest rates fall by 425 basis points (4.25*) and equity prices are flat. From an actuarial perspective, discuss the effect of this scenario on a defined benefit pension plan that is 60% invested in equities and 40% invested in bands. 9. (s points) Options are known to be a wasting asset. A. Why are options considered to be a wasting asset? B. As a wasting asset, which of the "Greeks" derives the rate of change of the option's premium volue? C. If you are long an option is the value of this "Greek" usually positive or negotive and why? 3 Ipace Extra Credit (3 points) A. A calf option delta is 0.57 . What is the delto of a put with the same expiration and strike price? B. A call option deita is 0.61 . What is the probability your coll option will expire in-the-money
