Financial planning

1.       What are FLEX options? What advantages do they offer to the investor with respect to OTC options? What about with respect to exchange traded options?

2.       Consider a call options contract on IBM. The current stock price is $ 100, the exercise price is $ 100, and the premium is $ 7.95 per share. Each contract is for 100 shares. What will be the applicable margin?

1. An Indian importer who has to pay in dollars can hedge by.

a. Going short in a forward contract

b. Buying a put option

c. Buying a call option

d. a) and (b)

2.Consider a T-bill with 144 days to maturity and another with 108 days to maturity. The quoted rate for both is 8%. Which of these statements is true.

a. The 144 day bill will have a lower price

b. The 144 day bill will have a higher price

c. The two will have an equal price

d. Cannot say


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