(a) Explain the similarities and differences between being the short party of a forward contract and being the holder of an American put option contract. [ 6 marks ] Suppose St is the price of a company's share at time t. Let at time t, ct be the price of a European call option contract and pt be the price of a European put option contract on the share with the same strike price K and maturity date T. The continuously compounded constant risk-free rate of interest is r per annum. Consider two times u and v such that t

(b) Show that: ct + K e?r(T ?t) + D e?r(u?t) = pt + St + E e?r(v?t) . [ 6 marks ]

(c) Discuss the impact of dividend payments and custodian fees on European call and put option prices. [ 4 marks ]

Suppose a toy craze in Canada makes a particular Swiss-produced toy very popular. What effect would this toy have on the balance of trade? It would tend to affect Canada's balance of payments but not its balance of trade It would tend to increase Canada's balance of trade deficit. It would tend to reduce any existing balance of trade deficit in Canada. It would tend to increase Canada's balance of trade surplus. Suppose the exchange rate between British pounds and Canadian dollars is originally $1.50 per pound. If it then changes to $2 for 1 pound, what will tend to happen to the volume of imports of British goods into Canada? The volume of imports will tend to rise The volume of imports will tend to change in an indeterminate direction The volume of imports will tend to fall. O The volume of imports will tend to stay the sameUse the compound interest formula A = Pe\" to answer the following questions. (a) How much will $19700 be worth in 38 years if it is invested at 1.84% interest compounded continuously? (b) How much should you invest initially so you have $88000 in 11 years if you can get 3.46% interest compounded continuously? Question 42 (6 points) Which of these three options is the better investment? Use the same P and t value throughout. a. An account that earns 8.2% interest compounding semi-annually b. An account that earns 8.17% interest compounding monthly C. An account that earns 8.15% interest compounding dailyQUESTION 12 Ordering decision making process for managers - T Follow up Identify problem Analyze the allomativos Implement the decision Determine alternative courses of action Select the best alternative QUESTION 13 What is correct explanation about first step for analzing the alternatives in decision making process? 8. Select an appropriate, measurable criterion O b. Carry out the chosen analysis * Select a method of analysis " Determine alternative courses of action