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المملكة العربية السعودية
وزارة التعليم
الجامعة السعودية اإللكترونية
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
FIN 405 – Financial Derivatives
Due Date: 05/11/2023 @ 23:59
Course Name: Financial Derivatives
Student’s Name:
Course Code: FIN 405
Student’s ID Number:
Semester: First
CRN: 11921
Academic Year:2023-24-1st
For Instructor’s Use only
Instructor’s Name: Dr. Muath Alolayan
Students’ Grade:
/10
Level of Marks:
General Instructions – PLEASE READ THEM CAREFULLY
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The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Assignment Questions from chapter 9,10 & 11: (Marks- 10)
Q1. What are the factors that influence the spot price of a storable asset, and
can you provide a brief explanation of each? (Marks 2.5)
Q2. How does the repurchase agreement affect the pricing of futures
contracts, and what does the implied repo rate indicate? (Marks 2.5)
Q3. What factors should be taken into account when determining the
suitable underlying asset for a hedge? (Marks 2.5)
Q4. Explain how to determine whether to buy and sell future when hedging.
(Marks 2.5)
Note:
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Each answer must not be less than 250 words
Answers
1. Answer2. Answer3. Answer4. Answer-
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