Answer all.

At the beginning of February 2021 (t=0), you purchased June vanilla European put with strike $50 on the stock FINMCOM, which is due to expire today (June 4) and notice-to-exercise must be made by 5pm. At the time of purchase, the stock was trading at $58/share.

After the purchase, you documented the stock's movements: after steadily falling from February through to early April to reach a low of $49, the stock reversed and kept rising and closed at $65 by the end of April. From then, the stock reversed and kept falling to close at a new low of $47 yesterday. The stock has a volatility of 30% p.a., and pays a dividend yield of 2.51% p.a.c.c. The risk-free rate of interest is 3% p.a.c.c. Assume the stock will close with a new YTD low of $45 at 4pm today.

a. What's your market view on the stock at t=0?

b. What is the moneyness of the option at the end of April? Does it have any intrinsic value?

c. You time traveled back to t=0, so you know the future because history will repeat itself. If you could take a position in an exotic option to give the highest payoff, instead of the vanilla option you had (keeping the same strike). Explain whether you would switch and to which option? Compare payoffs of your original option with your new choice. Be sure to state potential cons with your choice.

d. As part (c), you time travelled back to t=0. This time, you can enter any position (or multiple positions) in the underlying and/or any derivatives learned in this course. What kind of positions and contracts would you trade to earn the highest payoff with the lowest cost? You may choose any time-to-maturity for the contracts, and any strike/delivery price between $45 and $65. You must enter all positions on the same day in early February (t=0) when the stock was trading at $58/share; but you may exit any of these positions between t=0 and today, as long as all positions are closed out or expire by today (June 4). Explain and include calculation where possible.

Question # 3 This is about Hypothesis Proportion Confidence Interval (Level of confidence) Saint Francis Hospital in Mott Haven believes the percentage of residents in the neighborhood who have Healthcare insurance is 60%. The General Manager for the Emergency Room believes this number is to be different. He said, he conducts his own survey of 200 people and found that 100 people respondent yes to owning Health insurance Questions? 1) State the Null and Alternative Hypothesis?Question 20 (1 point) Saved An insurance agency sells auto and home insurance policies and has 1000 clients. The data below show the distribution of the clients. 300 clients purchase only auto insurance policies 500 clients purchase both, auto AND home insurance policies 200 clients purchase only home insurance policies What is the probability of purchasing home insurance conditional on purchasing auto insurance, i.e. the conditional probability? 5/8 5/3 5/10 3/8Question 22 (2 points} On January 1, a company purchased a five-year insurance policy for $2,200 with coyerage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: 0 Debit Prepaid Insurance, $440; credit Insurance Expense, $440. 0 Debit Prepaid Insurance, $2,200; credit Cash, $2,200. 0 Debit Insurance Expense, $440; credit Prepaid Insurance, $440. 0 Debit Insurance Expense, $440; credit Prepaid Insurance, $1360. 0 Debit Prepaid Insurance, $1360; credit Insurance Expense, $1360. Question 28 CH5LOT9 Not yet answered Mr. Khalid is a schoolteacher, he is earning 1050 OMR every month, he is Marked out of planning to save his money for his future, he is a risk taker by nature, in this 1.00 P Flag scenario which of the following investment place is more suitable to him based question on his natur V Mutual fund Investment Stock Market Fixed Deposit investment Investment in Insurance Question 29