Monash UniversityBFW 2751In Semester Assignment Questions with verified answers

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BFW2751 S2 2020 IN SEMESTER ASSIGNMENT BFW2751 DERIVATIVES 1 SEMESTER 2 2020 IN SEMESTER REGULAR ASSIGNMENT This is an open book assignment which requires your own composition of answers to the q... uestions with reference to text book, lecture slides and tutorials. Marks will be awarded according to deep learning and innovative answers that accurately defines and analyze the questions. This assignment will have a weightage of 10% of the total assessment of this unit. This assignment in released in the Moodle on 21th September 2020 and requires you to submit through Moodle by 3pm 4th October 2020. You are encouraged to submit early to avoid Moodle congestion at the final time line. I believe that you are eager to show your intellectual capacity in this unit by attempting all question on your own. As this is an open book assignment, no formula sheet is provided. STUDENT ID: 30554756 SURNAME: Chew GIVEN NAME: Alwyn Chuan Shyn Please read the next page carefully and sign and date the Student Statement before commencing the assessment task. 1BFW2751 S2 2020 IN SEMESTER ASSIGNMENT Intentional plagiarism or collusion amounts to cheating under Part 7 of the Monash University (Council) Regulations Plagiarism: Plagiarism means taking and using another person’s ideas or manner of expressing them and passing them off as one’s own. For example, by failing to give appropriate acknowledgment. The material used can be from any source (staff, students or the internet, published and unpublished works). Collusion: Collusion means unauthorised collaboration with another person on assessable written, oral or practical work and includes paying another person to complete all or part of the work. Where there are reasonable grounds for believing that intentional plagiarism or collusion has occurred, this will be reported to the Associate Dean (Education) or delegate, who may disallow the work concerned by prohibiting assessment or refer the matter to the Faculty Discipline Panel for a hearing. Student Statement:  I have read the university’s Student Academic Integrity Policy and Procedures.  I understand the consequences of engaging in plagiarism and collusion as described in Part 7 of the Monash University (Council) Regulations http://adm.monash.edu/legal/legislation/statutes  I have taken proper care to safeguard this work and made all reasonable efforts to ensure it could not be copied.  I have not used any unauthorised materials in the completion of this assessment task.  No part of this assessment has been previously submitted as part of another unit/course.  I acknowledge and agree that the assessor of this assessment task may for the purposes of assessment, reproduce the assessment and: i. provide to another member of faculty and any external marker; and/or ii. submit it to a text-matching software; and/or iii. submit it to a text-matching software which may then retain a copy of the assessment on its database for the purpose of future plagiarism checking.  I certify that I have not plagiarised the work of others or participated in unauthorised collaboration when preparing this assessment. Signature: Alwyn Alwyn Chew Chuan Shyn (Type your full name) Date: 03/10/2020 Privacy Statement The information on this form is collected for the primary purpose of assessing your assessment and ensuring the academic integrity requirements of the University are met. Other purposes of collection include recording your plagiarism and collusion declaration, attending to the course and administrative matters and statistical analyses. If you choose not to complete all the questions on this form it may not be possible for Monash University to assess your assessment task. You have a right to access personal information that Monash University holds about you, subject to any exceptions in relevant legislation. If you wish to seek access to your personal information or inquire about the handling of your personal information, please contact the University Privacy Officer: privacyofficer@adm.monash.edu.au Submission Due on: 4th October 2020 3pm (KL time) 2BFW2751 S2 2020 IN SEMESTER ASSIGNMENT Attempt all questions by giving the required answers and illustrations within the space provided below each question. Use Cambria 12 font with double spacing for your typed answers. Draw graphs using drawing tools in Microsoft office program. Do not cut and paste any Formula, tables, graphs or pictures in your answer space. Question 1. (20 marks) The Corona-Virus Pandemic has disrupted the operations of many business entities. Depending on the core business of a company, the continuity of its business is highly uncertain. This case highlights two companies in Malaysia that falls in this uncertain circumstance. First is the Getting Corporation, which operates fleet of hotels, restaurants and entertainment outlets. Second is the Fit Gloves Corporation, which produces surgical rubber gloves, face masks and deals with various medical equipment. Generally, the market sentiments for listed company shares has been bearish since the Covid-19 pandemic control orders were implemented in Malaysia in March 2020. However, the businesses that involved predominantly in healthcare have achieved uptrend movements in its stock prices while the businesses that involved in tour and entertainment has its stock prices dipped. Getting Corporations shares are currently trading at RM3.50 per share while Fit Gloves Corporation shares are trading at RM9.00 per share. Getting Corporation’s share prices had recorded a 10% drop in the last 4 weeks and had dropped about 40% since last year. Fit Gloves Corporation’s shares has recorded a 15% increase in the last 4 weeks and has appreciated by about 450% since last year. Assuming that you represent a financial institution that can trade options contracts and you have gathered information on both these firms. Based on the December 2020 European Options trading data on both these firms (which will expire on 28th December 2020), you are required to strategize the best options trading which can provide profit at lowest possible cost. Dec. 2020 Option Prices: Getting Corp. Dec. 2020 Option Prices: Fit Gloves Corp. Strike Price (RM) Call Price (RM) Put Price (RM) Strike Price (RM) Call Price (RM) Put Price (RM [Show More]

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