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Please help, Shonna's existing investment portfolio is made up of 45% equities, 45% bonds and 10% money market. Her intended investment position is 1,000 shares
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Shonna's existing investment portfolio is made up of 45% equities, 45% bonds and 10% money market. Her intended investment position is 1,000 shares of stock A and expects the performance of stock A to move sideways in the next six months and would like to improve her return over this period Given the following assumptions: o o o o Stock A current price 6 months put(95%) option pricing 6 months call (105% option pricing Tenor of structured product SGD 10.00 8% 7% 6 months (assume 12m/year) (a) What structured note will be suitable given her market view, explain briefly your reasons) (6 marks) tb) At the maturity of the note, Stock A was SGD 10.75, Given your answer in (a) what is the payoff for Shonna? Please show all calculations (4 marks) From your answer in (a) - name 2 key components and 2 key risks of such a structured product (c) (8 marks)Step by Step Solution
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