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Question 5 Suppose that you are the Senior Investment Analyst responsible for the equity Stock Market has recently been very volatile. The Chief Executive Officer
Question 5 Suppose that you are the Senior Investment Analyst responsible for the equity Stock Market has recently been very volatile. The Chief Executive Officer of your portfolio on the Ghana Stock Exchange for Alpha and Omega Investors. The Ghana company is considering selling Ecobank shares which is part of their equity investments in 6 months. Assume that it is now 19th February 2022 and that Alpha and Omega Investors has access to OTC equity option contracts as given below. Premiums are in GHS per share. CALL PREMIUMS PUT PREMIUMS Strike Price MAY JUNE AUGUST MAY JUNE AUGUST 6.00 0.60 0.50 0.50 0.40 0.30 0.55 5.00 0.50 0.50 0.60 0.40 0.30 0.50 Protecting against falling market values of their 10,000 Ecobank shares currently trading at GHS4 per share, Alpha and Omega Investors may decide to go either long in a put option contract, short in a call option contract or both. As the Senior Investment Analyst, choose any trading strategy and illustrate the position of Alpha and Omega Investors if the company decides to hedge using: 5 Question 5 Suppose that you are the Senior Investment Analyst responsible for the equity Stock Market has recently been very volatile. The Chief Executive Officer of your portfolio on the Ghana Stock Exchange for Alpha and Omega Investors. The Ghana company is considering selling Ecobank shares which is part of their equity investments in 6 months. Assume that it is now 19th February 2022 and that Alpha and Omega Investors has access to OTC equity option contracts as given below. Premiums are in GHS per share. CALL PREMIUMS PUT PREMIUMS Strike Price MAY JUNE AUGUST MAY JUNE AUGUST 6.00 0.60 0.50 0.50 0.40 0.30 0.55 5.00 0.50 0.50 0.60 0.40 0.30 0.50 Protecting against falling market values of their 10,000 Ecobank shares currently trading at GHS4 per share, Alpha and Omega Investors may decide to go either long in a put option contract, short in a call option contract or both. As the Senior Investment Analyst, choose any trading strategy and illustrate the position of Alpha and Omega Investors if the company decides to hedge using: 5
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