FMP

Aegis.Sameerdutta
Posts: 8
Joined: Mon May 09, 2016 10:39 am

FMP

Postby Aegis.Sameerdutta » Mon Oct 24, 2016 6:08 am

Please help on the attached query as answer seems to be contradictory to explanation
query.docx
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edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Re: FMP

Postby edupristine » Tue Oct 25, 2016 11:39 am

Hi Aegis

All options are incorrect here right answer is (-$200,$200,$350)

1. In first condition when RNS unhedge the prices, prices rises from $1800 to $2000 then it has loss of $200.
2. In second condition when RNS uses futures to hedge position, it has profit of $200 because selling prices is rises from $1800 to $2000
3. in long put position RNS sell the gold at gauranteed price and it will secure its prices by having a strike price of $50 , so from the amount of $2000 and $50 strike price the final amount is $2400 so its $350. (2400-2000-50)


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