risk management apply to energy mid-term exam review
risk management apply to energy mid-term exam review FINE-7670-01
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This 2 page Study Guide was uploaded by YUQING XU on Thursday February 25, 2016. The Study Guide belongs to FINE-7670-01 at Tulane University taught by Pan, Xuhui in Fall 2015. Since its upload, it has received 63 views. For similar materials see Risk Mgmt and App to Enrg Firm in Finance at Tulane University.
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Date Created: 02/25/16
1) Why will futures prices be slightly higher than forward prices, if the price of the underlying asset is highly positively correlated with interest rates? 2) Assume the interest rate is constant, what factors will cause futures prices different with forward prices? 3) It may increase risk to hedge using futures when all other competitors do not. 4) Why is it never optimal to exercise American call option written on a non-dividend paying stock early? 5) Metallgesellschaft (MG) (losses from futures trading) 6) Weather derivatives can improve firms’ value and investment 7) Commodity futures market in recent years (speculation vs. hedging) 8) EnCana and Nucor’s deal (investing in onshore gas wells rather than using financial derivatives) 9) The case of “Amaranth Advisors” 10) General Arbitrage Strategy 2) Positive cash inflow at the beginning and zero cash flow at the end. Make sure all your positions are closed out. 10) Trading Strategies of Options 1) Positions in an Option & the Underlying or Cash Buying a protective put Buying a protective call Writing a covered call Writing a covered put Cash Secured Put Trading Strategies of Options 2) Spreads Bull/Bear Spread Butterfly Spread Calendar Spread 3) Combination Straddle Strangle
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