Ashford BUS405 Week 5 Discussion (dq1+dq2) Latest

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BUS405 Principles of Investments

Week 5 Discussion

DQ1 – Hedging with Futures

Complete Concept Question 7 from Chapter 14: The town of South Park is planning a bond issue in six months and Kenny, the town treasurer, is worried that interest rates may rise, thereby reducing the value of the bond issue.  Should Kenny buy or sell Treasury bond futures contracts to hedge the impending bond issue?  Remember to complete all parts of the question and support your answers with examples from the text and other resources. 

DQ2 – Option Strategies

Complete Concept Question 12 from Chapter 15: Recall the options strategies of a protective put and covered call discussed in the text. Suppose you have sold short some shares of stock. Discuss analogous option strategies and how you would implement them. (Hint: They’re called protective calls and covered puts.)  Remember to complete all parts of the question and support your answers with examples from the text and other resources. 

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