FOLLOWING QUESTIONS ARE FROM CASE STUDY "The Galaxy Dividend income growth fund option investment strategies"

Q.

Suppose the galaxy Dividend income growth fund already owns JP Morgan, Facebook stock and receives a report casting doubt on the company's near-term performance. How might it use options to protect itself from price declines over the next few months? Examine the protective-put position Examine the covered-call position Each of these strategies offers us different types of protection. How should we choose between them?

Q.

It is sometimes said that equity itself is like a call option on the firm. In what sense is this true? Can real investment opportunities be valued as options?