Select the best option strategy for each of the investor objectives by selecting the matching number. (3 marks)  Write call options on stocks owned (Covered call) Write put options on stocks owned (Protective put) Buy put options1. Protect against potential losses on stocks owned.2. Generate additional yield on stocks being held for the long term.3. Use a limited amount of money to profit if a stock you believe is going down drops in value.

How can call options and put options be used to reduce risk? State at least 2 conditions.

Consider the following ways of protecting a stock portfolio against price declines. Short 3-month forward contract. Buying at-the-money 3-month put option for cash. Buying and selling an out-of-the-money 3-month put and call option. Compare these strategies and include what the specific initial cost and expiration date payoff potential would be for each strategy over the next 3 months. In response to peers, provide feedback on the strategies discussed.

A put option has an N(-d1) of 0.5329. You wish to construct a strategy that mimicks the payoff of a short straddle that shares the same strike as the put above, as well as an appropriate underlying position. If your strategy contains 141 put options, determine how many shares you need to buy or sell to achieve this goal. If you need to buy shares, please input a positive (whole) number. If you need to sell shares, please input a negative (whole) number.

Which of the following statements is CORRECT?a.Put options give investors the right to buy a stock at a certain strike price before a specified date.b.Call options give investors the right to sell a stock at a certain strike price before a specified date.c.Options typically sell for less than their exercise value.d.An option holder is not entitled to receive dividends unless he or she exercises their option before the stock goes ex dividend.

On the basis of risk compare various investment options