Explain marked to market by using the implied volatility
Explain marked to market by using the implied volatility.
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In this situation the alternative, being exchange traded, would almost certainly be marked to market using the implied volatility, however the ultimate profit will depend upon the realized volatility (assume that optimistic and it is as forecast) and how the option is hedged.
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Great Corporation has the following capital situation. Debt: One thousand bonds were issued five years ago at a coupon rate of 11%. They had 20-year terms and $1,000 face values. They are now selling to yield 9%. The tax rate is 37% Preferred stock: Two thousand shares of preferred are outstanding
How is the option hedged?
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