Why should I invest in Mutual fund which is not secured
rather than investing in Any Nationalised bank which is
giving me guaranteed interest rate of 9.5% per annum which
is also more secured?
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Answer Posted / shash
The risk and returns in any financial instrument have a
direct relationship.i.e. higher the risk, higher is the
returns.
In the case of indian economy growing at the rate of app. 9
to 10%,where the indian corporate sectors have major
contribution.Putting the money in such a financial products
which invest the money in such sector, will give more
returns.Also it seems less risky considering the global
economic scenario.
Also the money management by expert will certainly minimise
the risk as compared to the investment by yourself.
The returns you get in such instruments is as good as 20-
50% of your invested amount.
so taking little more risk, you can at least double the
returns.
| Is This Answer Correct ? | 22 Yes | 3 No |
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Read the case carefully and answer the questions given at the end: CALLS PUT A B C Months of expiration 3 9 3 Continuous yearly risk-free Rate (Rf) 10% 10% 10% Discrete yearly Rf 10.52% 10.52% 10.52% Standard deviation of Stock returns 40% 40% 40% Exercise price Rs.55 Rs.55 Rs.55 Option price Rs.2.56 - Rs.6.20 Stock price Rs.50 Rs.50 Rs.50 Cash Dividend Re.0 Re.0 Re.0 1) Why should call B sell for more than call A? 2) Is the put call parity model working for options A&C? 3) Calculate the Black Scholes values of call A & Call B?
