Need some help with questions for Financial Markets?

1. Show the payoff pattern an investor would get if he/she bought a stock and bought a put against the stock. Explain.


2. Show the payoff pattern for a naked purchase of a call on a stock. Show how (and explain why) this is similar to buying a stock and buying a put on the stock. Explain.


3. Efficient markets theory says that returns over or above “required” should be unpredictable. If returns are unpredictable, does this mean the efficient markets theory is true? Explain.


4. The discount rate on a 90-day Treasury bill declines by one “basis point.” For each $1,000,000 of face value, how much does the price of this bill change?


5. Which is larger, the quoted yield on a 90-day Treasury bond or the rate on a 90-day Treasury bill? Explain.Need some help with questions for Financial Markets?
The first two question are answered in the article at





http://www.optionvueresearch.com/main/pr…





If you have trouble understanding that article you can do a google search using





';long call'; ';synthetic equivalent';





as the key and find several hundred more articles on the same subject.