Discuss what option and forward contacts are, their pros and cons. various motivations for any companies to enter forward contracts and option contracts.
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Discuss what option and forward contacts are, their pros and cons. various motivations for any companies to enter forward contracts and option contracts.
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- Options contracts are affected by a number of factors. What are those factors? Which is most AND least significant?What is the payoff to call option buyer and seller?a) Explain how contracts help to relocate, share and spread risk. b) How can option contracts to be used for risk management? Explain the meaning of exercise price and option fee. c) What factors favor the exercise of market power in electricity markets? d) What is Financial Transmission right and how they are used
- Explain how a company can use forward contracts to eliminateFX riskDiscuss how equity can be viewed as an option. Who has theoption, and what decision can they make?n options markets, option premiums are paid by: option writers to buyers. option buyers to sellers. both option buyers and sellers. put option buyers only.