Question
Answer following questions in very brief: a)If you must buy some asset in future and you just want to hedge the risk what sort of
Answer following questions in very brief:
a)If you must buy some asset in future and you just want to hedge the risk what sort of derivative trading will you do? Explain in brief with payoff diagram.
b)If you have long position in one asset and you want to hedge the risk of price drop in that asset while still having the upside in case the asset price goes up, what sort of derivative trading will you do? Explain in brief with payoff diagram.
c)Briefly explain the benefits of having a thriving capital markets even in an economy like India where banking system provides most of the funding to firms.
d)What are the four types of traders? Name two types who facilitate the price discovery process and briefly state how do they facilitate?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started