Premium Essay

Homework 4 Option Investment Policies

In: Business and Management

Submitted By Laynebaril
Words 387
Pages 2
Homework 4 Option Investment Policies

Click Link Below To Buy: http://hwcampus.com/shop/homework-4-option-investment-policies/ STEP ONE: Update securities prices daily. Prepare an Excel Spreadsheet Investment analysis of Investment Returns. Submit the Investment Returns Analysis to the P4-Investment Returns Analysis Assignment Folder.
STEP TWO: You have been given an additional $100,000 to purchase a Portfolio of five (5) Option Contracts at Beginning of Week 4 (Note: Recommend Using CBOE.com for Option Information.)
Please keep in mind that you do not have the luxury of trading or selling and/or buying securities during your portfolio holding period.
After you determine your initial portfolio you must buy the portfolio using the HYPERLINK "http://www.cboe.com/tradtool/virtualtrade.aspx" CBOE Virtual Trade Tool ( HYPERLINK "http://www.cboe.com/tradtool/virtualtrade.aspx" http://www.cboe.com/tradtool/virtualtrade.aspx). The commission costs per trade (using CBOE Virtual Trade) are $9.95/trade for stocks and ETFs and $14.95/trade for options.
The securities you select for your portfolio can be selected from any traded securities that are available on CBOE Virtual Trading. (Exception! you may not invest in mutual funds or the S&P 500 market index)
STEP THREE: The assignment for the fourth week is to make your first option contract purchases using the CBOE Virtual Trade Tool ( HYPERLINK "http://www.cboe.com/tradtool/virtualtrade.aspx" http://www.cboe.com/tradtool/virtualtrade.aspx). What did you purchase and how does it relate to the investment policies and strategies statement you developed for Homework #1? Did you modify the investment policies and strategies? If you changed your investment policies and procedures what exactly did you update? If you revised your investment strategies did you inform the client?
Please submit your Homework #4 Option…...

Similar Documents

Premium Essay

Homework Business Policy

...Week 3 - Homework P4-1. A best-selling author decides to cash in on her latest novel by selling the rights to the book’s royalties for the next four years to an investor. Royalty payments arrive once per year, starting one year from now. In the first year the author expects $400,000 in royalties, followed by $300,000, then $100,000, and then $10,000 in the three subsequent years. If the investor purchasing the rights to royalties requires a return of 7 percent per year, what should the investor pay? A4-1 P = $400,000+$300,000+$100,000+$10,000=$725,122.13 1.071 1.072 1.073 1.074 P4-12. Bennifer Jewelers recently issued 10-year bonds that make annual interest payments of $50. Suppose you purchased one of these bonds at par value when it was issued. Right away market interest rates jumped, and the YTM on your bond rose to 6 percent. What happened to the price of your bond? A4-12 P = 50/1.06 + 50/1.062 + 50/1.063 + 1.050/1.0610 = $926.40 P5-1. The equity section of the balance sheet for Hilton Web-Cams looks like this: Common stock, $0.25 par $400,000 Paid-in capital in excess of par $4,500,000 Retained earnings $1,100,000 a. How many shares has the company issued? 400,00/.025=1.6 MILLION SHARES b. What is the book value per share? (400,000+4,500,000+1,100,000)/1.6 MILLION SHARES =......

Words: 860 - Pages: 4

Premium Essay

Investment Policy Statement

...Investment Policy Statement - Sample Plan (for reference only) John Doe IRA Prepared on March 30, 2009 Prepared by Brent Mason Charles W. Mason 7474 N. Figueroa St Los Angeles CA 90041 323-254-3072 eekim@cwmason.com Cover Pages Cover Pages Table of Contents Introduction Client Information Statement of Objectives Risk Profile Current Accounts Current Allocation Constraints Miscellaneous Expenses Asset Allocation Current vs. Target Allocation Investments Investment Evaluation & Selection Proposed Portfolio Investment Strategy Analysises Allocation Comparison Equity Investment Style U.S. Stock Sector Analysis Regional Exposure Fixed-Income Investment Style Credit Quality Interest-Rate Risk Mutual Fund Fees and Expenses Performance Risk and Return Statistics MPT Statistics Implementation Plan Action Plan Monitoring Your Progress Legal & Regulatory Agreement Appendices 1 2 3 3 3 3 3 4 4 4 4 4 4 4 5 5 5 5 6 6 7 7 7 7 7 7 8 8 8 8 9 9 9 9 10 Planning Reports Appendices Performance of Proposed Securities Risk Tolerance Questionnaire Data as of 3/30/2009 Page 3 of 10 John Doe IRA Investment Policy Statement Introduction The Investment Recommendation is a detailed list of the changes recommended to your current portfolio holdings. The recommended list of funds, stocks, and/or other investments has been selected in order to implement a new asset allocation policy with either a higher potential return than your current allocation, a lower level of risk...

Words: 3939 - Pages: 16

Free Essay

Policy Options for Planning Agricultural Education in India

...Human Capital Needs in Agriculture and Allied Sectors - Policy Options National Academy of Agriculture Research Management (NAARM, Hyderabad) and Institute of Applied Manpower Research (IAMR, New Delhi) The Backdrop Agriculture sector is the mainstay of Indian economy ensuring food security and providing livelihood to millions involved either directly or indirectly with this sector. This sector has a strong mutually beneficial interface with the industry sector. Notwithstanding its declining share in country’s GDP, agriculture continues, and will continue to be the key to nation’s growth and development. Over the years Indian agriculture had made tremendous progress which, in a large measure, is directly or indirectly, due to the contributions of agricultural science and technology, and development of human skills to take advantage of the technology, be it through development of improved seed and planting material, plant protection, irrigation and soil conservation measures, mechanization and other productive agricultural practices as well as in putting on ground a massive infrastructure for extension work and transfer of technology to the farmers. In recent times, however, the pattern of agricultural growth has become somewhat erratic. The challenges that Indian agriculture faces today because of factors like shrinkage of available land, decline in soil quality and response to inputs, inadequate and uneven penetration of technology and skills, and above all...

Words: 5228 - Pages: 21

Premium Essay

Accounting Homework 4 Solutions

...Chapter 13: 1) E13-14 (5 points); 2) E13-16 (5 points); 3) E13-18 (5 points); 4) E13-19 (1 point); 5) P13-23A (8 points); 6) P13-25A (8 points); 7) P13-33A parts a, b and c only (8 points); 8) P13-39B (8 points); 9) P13-42B (7 points) Solutions: E13-14 (5 points): (a) The cash payback period is: $48,000 ÷ $8,000 = 6 years The net present value is: | | Time Period | | CashFlows | × | 9% DiscountFactor | = | PresentValue | Present value of net annual cash flows | | 1–8 | | $8,000 | | 5.53482 | | $44,279 | Present value of salvage value | | 8 | | 20,000 | | 0.50187 | | 10,037 | | | | | | | | | 54,316 | Capital investment | | | | | | | | 48,000 | Net present value | | | | | | | | $6,316 | Using financial calculator: CF0=-48,000; C01=8,000; F01=7; C02 = 28,000; F02 = 1; I = 9; CPT NPV = 6,315.88 (b) In order to meet the cash payback criteria, the project would have to have a cash payback period of less than 5.6 years (8 × 70%). It does not meet the criteria. However, the net present value is positive, suggesting the project should be accepted. The reason for the difference is that the project’s high estimated salvage value increases the present value of the project. The net present value is a better indicator of the project’s worth. E13-16 (5 points): Project A: | | Time Period | | CashFlows | × | 10% DiscountFactor | = | PresentValue | Present value of net annual cash flows | | 1–8 | |......

Words: 2125 - Pages: 9

Premium Essay

Immigration Policy Options in Tennessee

...that appear relevant to its passage. Obstacles to Previous Reform Attempts One of the greatest challenges for our group to confront is the elevated level of partisanship currently present in Congress and the federal government as a whole. Research demonstrates that over the last several decades, increasing division along party lines-- particularly in Congress’ voting patterns—has ignited simultaneous division over immigration policy and reform. A 2011 study released by the Immigration Reform Caucus of the House of Representatives revealed that agreement on immigration-related legislation in both the House had dropped on average 4 - 5% with each successive session of Congress. These numbers correlated closely with similar analyses of changes in party polarization during the same period (1975-2005). Overall, these data portray the Democrats' as supporters of policy that is more forgiving for undocumented immigrants—including more amnesty initiatives and citizenship measures, while reflecting the Republican focus on tighter enforcement of existing policy and concern for national security issues related to the U.S.-Mexico border. This dichotomy manifests an element of agenda-setting that must be addressed if our organization seeks Congressional consideration and approval of our legislation: bipartisan support. President Obama recently championed bipartisan approval for among Senate leaders for a new proposal requiring biometric identity cards for all immigrants and overall......

Words: 954 - Pages: 4

Free Essay

Noli Investment Option

...Noli should support the California investment option. I evaluated each investment option considering the four dimensions of distance, Noli’s strategic objectives and organization politics. Many times firms enter foreign markets not understanding the context of them. The four dimension of distance; geographic, cultural, political/administrative and economic, all help to create context when deciding to enter a foreign market. However, they must be evaluated keeping long term business strategy in mind. Evaluating this decision culturally; the US, especially California, has one of the most diverse cultures as far as food and population. This is partially evident by the menu appealing to Americans in Guam. Moreover, Jollibee’s analysis of California indicates a high Filipino expatriate concentration and low level of competitors; two things relatively easy to quantify. The Hong Kong location is expected to have far less Filipinos than the Central location which struggled to attract locals, but did an excellent job with expatriates. This company understands expatriates. Moreover, the ongoing issues in China, for example, mangers quitting, reflects some cultural differences that Jollibee is still struggling with in this region of the world. The lack of solid and positive information of New Guinea is indicative that this market, as this point, is not yet ready to have “flag-planted.” Moving to geographic distance; certainly the California is the furthest from the parent country in......

Words: 639 - Pages: 3

Premium Essay

Homework Policy

...Homework is an issue that affects both students and teachers on a daily basis. As teachers we must expect great things from our students and for our students to achieve great things, we need them to study and do work at home to help emphasize new information and concepts being taught in the classroom. Teachers must teach self- motivation and actively engage their students to do homework and study on a nightly basis. For students as well as their families homework can often be seen as chore that they must find time for between afterschool activities, their parents work schedules, and just wanting to play. Teachers must find just the right balance of homework to help reinforce what is being taught in the classroom while allowing for family time as well as accommodating the busy schedules many American’s face. Ms. Zalogwe has a zero-tolerance homework policy due to problems with students and homework in the past. She clearly lays out the policy at the beginning of the year and sends parents a handout so that they are also informed of her policies. It is important as a teacher to clearly explain to students as well as their parents exactly what is expected from them. I do believe a teacher should allow for some flexibility in their homework policies, while at the same time teaching self-motivation. Homework should reinforce what is being taught in the classroom and allow for positive social interaction. Homework should accommodate the varying learning levels found in the......

Words: 2317 - Pages: 10

Free Essay

Week 4 Homework

...ACCT553 Week 4 Homework ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬_________________________________________________________ Please provide your answer to each question in the space provided below. When finished, submit to the DropBox. Chapter 14 1. Please describe the concept of "double taxation" and discuss which entity(ies) are subject to this type of taxation. (5 pts) Double taxation is tax on income of a business entity and second tax on distributions made to owners. The classic example is dividends paid to an owner from a corporation. 2. What types of taxpayers are considered "with regard to special ordinary loss treatment of IRC Section 1244 stock? (5 pts.) The eligible" taxpayers are the individuals or partnerships who are the original owners of shares in electing domestic small business corporation. The stock must be issued for property, common or preferred, domestically chartered and otherwise meet the tests to qualify as 1244 stock. 3. Please describe how the treatment of capital gains (losses) differs for a C Corporation as compared to an Individual. ( 5 pts.) Individuals net their capital gains and losses together, and the result is reported on an individual form 1040. Net long term capital gains are taxed at rates currently discounted to ordinary rates. Capital losses can be deducted up to $3,000 per year against ordinary income, with carrybacks and carry forwards available for those losses. C corporations may net capital losses against capital gains only, and pay......

Words: 297 - Pages: 2

Free Essay

Gold Etfs as an Investment Option

...PAPER ON “Gold ETF’s – An Investment Option” By Pawan Walecha (M.B.A.-Finance) pavan_walecha@rediffmail.com 9595532810; 9819420664 Gold ETF’s – An Investment Option Abstract Financial investment is putting money into something with the expectation of gain that upon thorough analysis has a high degree of security for the principal amount, as well as security of return, within an expected period of time. Gold has been used as a store of value and form of currency since ancient times. Gold has always been a symbol of stability and wealth. People tend to think about buying gold more as a saving than vehicle for as an investment but it does not need to be so. Gold has the same features as every other asset worth investing in, whether stock, bonds, mutual funds, or even commodities like corn, tobacco, crude oil or other precious metals. The present paper aims at discovering and analyzing risk in the emerging security in the stock market i.e Gold ETFs. The basic aim of the study is to study the financial performance of Gold etfs and to check its suitability for inclusion of gold etfs, rating of selected Gold etfs is also done based on funds performance. Keywords: Gold Exchange Traded Funds, Beta, Performance evaluation, NSE. Introduction The idea of Gold ETF was first conceptualized by Benchmark Asset Management Company Private Ltd. in India, when they filed a proposal with the SEBI in May 2002. However, there was no regulatory approval then and later it was launched in......

Words: 1665 - Pages: 7

Free Essay

Homework Policy

...requests that students turn in their homework at the beginning of school on the right side of her desk. She also asks that students pick up their graded work from the basket on the left side of her desk in the morning. The students that don’t do either of them within the set amount of time, must ask Ms. Smith about an extension or for their graded assignment if possible. Ms. Smith will let students appeal their grades if they think there is a grading mistake. In order to make a formal appeal, they must write 1-2 sentences explaining why they think there is a mistake. They need to have support and the original answer stapled to the back. To find out the effectiveness of Ms. Smith’s homework policy for my 4th grade students, we need to consider whether her policy establishes and maintains three critical points in classroom management and learning. The three critical points are 1.) positive social interaction between students, teachers, and parents, 2.) motivation, and 3.) active engagement. I discovered that Ms. Smith’s policy could go in either point but it depends on how she communicates with the students and parents. If she is as strict as she sounds in her written policy and how long it is, some students and parents might grow with resentment to Ms. Smith. The ones with literacy problems will have the hardest time understanding her policy unless she verbally explains it to them several times throughout the year. However, if her policy is used as a guide and she has a......

Words: 1938 - Pages: 8

Premium Essay

Investments Homework Ch2

...Matt Palella Investments Professor Mullen Chapter 2 6. Municipal bond interest is tax-exempt making them the better choice for high-income investors. 7. a. 86:14 = 86.43750% of par = $ 864.375  b. The coupon rate is 3.5% = $35.00 annually and $17.50 semiannually c. Current yield = $35.00/$864.375 = 4.05% (annual coupon/income) 8. $1000 / 1.02 = $980.39 9. Taxable income: .30 x 4 = $1.20 .30 x 1.20 = $0.36 After-tax income: $4.00 - $0.36 = $3.64 10. a. 5000 / 67.32 = 74.27 shares (should just be 74 shares) b. Annual dividend income: 74.27 x 1.52 = $112.89 c. EPS: 67.32 / 11 (P/E) = $6.12 d. The closing price is 67.32 which is a +0.47 change from the previous close 11. a. t=0: (90+50+100)/3 = 80 t=1: (95+45+110)/3 = 83.333333 b. 250/3 = 83.333 83.333 = (95+45+55)/divisor = 2.340 c. The return is zero 12. a. (95 x 100 + 45 x 200 + 110 x 200) – (90 x 100 + 50 x 200 + 100 x 200) (90 x 100 + 50 x 200 + 100 x 200) Rate at market-value-weighted index= 3.85% b. 1/3 (95-90/90 + 45-50/50 + 110-100/100) = 1.85% CFA Problems 1. D. 2. 6.75 / (1-0.34) = 10.23% 3. A. – Write a call option 4. a. The taxable bond b. The taxable bond c. Either one (after tax yield is the same) d. The municipal bond 5. 0.056 = 0.08(1-t) = .30 Answer = 30%...

Words: 275 - Pages: 2

Free Essay

Homework Policies

... Per the scenario, at the beginning of the year Mr Collet verbally explains his homework policy and gives his students handouts for themselves and their parents with all of the information. Research shows that when families take an active, direct role in their children's education, children get better grades and test scores... (Family Involvement Planning, 1998). After all, students can learn from their peers as well as their instructors. In addition, a warmly sociable environment eases stress, making learning easier. Read more : http://www.ehow.com/info_7897890_strategies-classroom-social-interactions.html students returning from excused or unexcused absences will need to complete make up work. Therefore, it is important that teachers create late work and make up work policies that they can follow consistently and with a minimum of effort. Anything less will result in confusion and further problems. (kelly, 2015) If you do not have a consistent late work policy, your students will notice. Students who turn their work in on time will be upset and those who are consistently late will take advantage of you. The key to an effective late work and make up work policy is your daily enforcement. Once you pick what you want for you policy, then stick to it. Only by your consistent actions will this become one less worry in your school day. Here is an example of a late work policy that a teacher might hand out to students and parents at the beginning of the......

Words: 306 - Pages: 2

Premium Essay

Business Policy Homework

...find too costly to try to imitate. d. Above-average returns- are returns in excess of what the investor expects to earn from other investments with similar amount of risk. e. Strategic management process- is the full set of commitment, decisions, and actions required for a firm to achieve strategic competitiveness and earn above average returns. 2. What are the characteristics of the current competitive landscape? What two factors are the primary drivers of this landscape? f. The current competitive landscape characteristics are that the markets are always changing and also noteworthy. Managers must adopt a new way of thinking to earn above-average returns. g. The two factors that drive the current competitive landscape are the globalization of industries and significant technological changes. 3. According to the I/O model, what should a firm do to earn above- average returns? h. The firm should identify five points to earn above-average returns? i. Study the external environment. ii. Locate the industry with the potential for above-average returns. iii. Identify the strategy called for by the attractive industry. iv. Develop or acquire assets and skills needed to implement the strategy. v. Use the firms strengths to implement the strategy. 4. What does the resource-based model suggest a firm should do to earn above-average returns? i. The firm should identify five......

Words: 431 - Pages: 2

Premium Essay

Homework 4

...HOMEWORK 4 1. The reason a firm goes bankrupt will likely be a sign of the real value of its assets. If a firm goes bankrupt due to its core business its assets are probably overvalued and therefore it will most likely default on its loans. If the bankruptcy is not related to the companies core business then it is likely that the value of the assets is not overvalued and are closer to their actual book value. So a company that goes bankrupt due to risky investments is likely to have more valuable collateral. 2. The company has increased advertising costs each year since 2013 in 2015 they spent 94.3 million on advertising. Capital expenditures are as follows: Changes in fixed assets 2014-15 (1435873000-214112000)-(1490604000-223296000)=-45637000 Depreciation for 15 (however this includes amortization) 145242000-136081000=9161000 Capital expenditures -45637000+9161000= 36476000 Dividends for 2015 70832000 Share repurchases 306255000 The company spent 553500000 for all of the above items, which is about 18.5 percent of their total revenues. The amount spent each year has also increased therefore I would not conclude that the company has been trying to save money on the above items. 3. A.)Cash flow from operations: 368611000 Average liabilities: [(418475000+970825000+125033000)+(466110000+832302000+129098000))/2=1470921500 cash flow from operations to average total liabilities ratio: 368611000/1470921500=.2506 B.)current......

Words: 360 - Pages: 2

Premium Essay

Analysis of Investment Options

...WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT & RESEARCH SPECIALISATION PROJECT ON ANALYSIS OF INVESTMENT OPTIONS BY MAHIMA SUHALKA PGDM RM 2014 – 2016 (FINANACE SPECIALISATION) ROLL NO. 48 PROJECT FACULTY GUIDE PROF. PRITI SAMANT PROJECT COMPLETION CERTIFICATE This is to certify that project titled “Analysis of Investment Options” is successfully done by Ms. Mahima Suhalka in partial fulfilment of her two years full time course ‘Post Graduation Diploma in Management’ recognized by AICTE through the Prin. L. N. Welingkar Institute of Management Development & Research, Matunga, Mumbai. This project has been completed under my guidance. ___________________________ (Signature of Faculty Guide) Name: ______________________ Date: ______________________ Acknowledgement I take this opportunity to express my sincere gratitude to everyone who supported me throughout the course of this PGDM project. I am thankful for their aspiring guidance, invaluably constructive criticism and honest advice during the project work. I express my warm thanks to Prof. Priti Samant, my project guide who provided me with critical insights on this project and helped me make this a success. I would also like to acknowledge the help of all my friends and respondents who enabled me to conduct this research project. Thank You All!! Table of Contents Chapter 1 Introduction ...

Words: 12659 - Pages: 51