1. Compare and contrast the risk and return characteristics of the following investment strategies. a) Investing in (equity) shares. b) Investing in shares and buying put option on the shares. c) Investing in shares and buying put option and selling call option on the shares.
2. Although FRAs are available in the market for a variety of maturities, if a party wants to enter an FRA expiring in 45 days on 115-day LIBOR, that which of the following are what these contracts are called? A) off maturity FRA contracts B) standard FRA contracts C) off the run FRA contracts D) common FRA contracts.