You Have $1250 000 Invested in a Property Index,which Has

question 36

Multiple Choice

You have $1250 000 invested in a property index,which has a current value of 9000.0.If a put option is available with an exercise price of 11500,standard deviation of returns is 40%,time to maturity is 9 months and risk-free rate is 8% p.a. ,how many contracts are required for an exact hedge of this index? Assume an index point value of $10.00.

• A) 10
• B) 11
• C) 24
• D) 50

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Definitions:

McGregor's Theory X

A management theory assuming that employees are naturally unmotivated and dislike work, leading managers to take a controlling approach.

Higher-Order Needs

Refers to psychological needs that are related to the self-actualization and personal growth of an individual, as highlighted in Maslow's hierarchy of needs.

Benevolents

Individuals who exhibit a disposition to do good and to act with kindness and charity.

Equity Ratio

A financial metric that measures the proportion of a company’s total assets that are financed by shareholders' equity, indicating financial stability.