... Stock Market Ideas. 19) 9) Options on stock indexes are similar to exchange-traded funds (ETFs), the difference being that ETF values change throughout the day whereas the value on stock index options change at the end of each trading day. The 4) Which is worth more? q. Start studying Options on Stock Indices, Currencies and Futures Contracts (Ch. Explain how currency options can be used for hedging. The current exchange rate is 1.2000. There are futures and options markets available for all of the popular stock indexes. $p$ is the price of a European put option, and both options have exercise price $X$ and maturity $T$. Help. The stock price is replaced by the value of the index multiplied by exp(rT), C) to use options on an index to provide protection against the portfolio falling of 0.8, D) 2% and the foreign risk-free rate is 5%. The S&P 100 Index (OEX and XEO) The S&P 500 Index (SPX) The Dow Jones Index times 0.01 (DJX) The Nasdaq 100 Index (NDX) Contracts are on 100 times index; they are settled in cash; OEX is … contract is on 100 times the index. 100 put options to sell one unit of currency B for currency A at a strike price to use options on an index to provide protection against the portfolio falling The risk-free rates of interest in Canada and the United States are 9 % and 7 % per annum, respectively. Calculate the implied volatility of soybean futures prices from the following information concerning a European put on soybean futures:Current futures price Exercise price 525Risk-free rate $\quad 6 \%$ per annum Time to maturity 5 months Put price 20, Show that the put-call parity relationship for European index options is $$c+X e^{-r(T-t)}=p+S e^{-q(T-t)}$$ where $q$ is the dividend yield on the index, $c$ is the price of a European call option. 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