A single-name trader asks you to approve a short 1Y, $150m Notional 130% strike call on Tellurian (on Yahoo Finance the ticker is Tell) with 1Y maturity. Do you approve of it? Why? Do you request any conditions for your approval?

A put option in finance allows you to sell a share of stock at a given price in the future. There are different types of put options. A European put option allows you to sell a share of stock at a given price, called the exercise price, at a particular point in time after the purchase of the option. For example, suppose you purchase a six-month European put option for a share of stock with an exercise price of $26. If six months later, the stock price per share is $26 or more, the option has no value. If in six months the stock price is lower than $26 per share, then you can purchase the stock and immediately sell it at the higher exercise price of $26. If the price per share in six months is $22.50, you can purchase a share of the stock for $22.50 and then use the put option to immediately sell the share for $26. Your profit would be the difference, $26 − $22.50 = $3.50 per share, less the cost of the option.   If you paid $1.00 per put option, then your profit would be $3.50 − $1.00…

The promised cash flows of three securities are listed below. If the cash flows are risk-free, and the risk-free interest rate is 4.5%, determine the no-arbitrage price of each security before the first cash flow is paid. (Click on the following icon in order to copy its contents into a spreadsheet.) Security A B C Cash Flow Today (S) 700 0 1,400 The no-arbitrage price of security A is S Cash Flow in One Year ($) 700 1,400 0 (Round to the nearest cent.)

ABC Co. has a large amount of variable rate financing due in one year. The management is concerned about the possibility of increases in short-term rates. Which would be an effective way of hedging this risk?a. Buy Treasury notes in the futures market.b. Sell Treasury notes in the futures market.c. Buy an option to purchase Treasury bonds.d. Sell an option to purchase Treasury bonds