Option Based Porfolio Insurance Analysis of Protective Put and Synthetic Put Investment Strategies is popular PDF and ePub book, written by Felix Lütjen in 2017-07-24, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Option Based Porfolio Insurance Analysis of Protective Put and Synthetic Put Investment Strategies can be Read Online from any device for your convenience.
Option Based Porfolio Insurance Analysis of Protective Put and Synthetic Put Investment Strategies Book PDF Summary
Bachelor Thesis from the year 2016 in the subject Business economics - General, grade: 1.7, University of Frankfurt (Main), language: English, abstract: Risk aversion is a common trait among investors. While it is possible to reduce risk attributed to specific industries and regions by diversifying among different securities, market risk affects all securities on the market. Even a perfectly diversified portfolio is subject to systematic or market risk. It can be managed through diversification across asset classes, for example by shifting some of the funds invested into risk-free assets. For some investors, this yields unsatisfactory results as the expected return directly decreases linearly with an increase in the position in the risk-free asset. Portfolio insurance (PI) describes an alternative set of strategies that allows investors to reduce their exposure to market risk by guaranteeing the value of the portfolio to be above a certain value at the end of the investment period while allowing for participation in rising stock markets. Option-based portfolio insurance (OBPI) refers to a set of strategies in which either a conventional put option (protective put) or a replicated put option (synthetic put) is used to insure a portfolio against adverse price movements. In theory and assuming perfect market conditions, protective put (PP) and synthetic put (SP) yield identical payoffs and have the same cost. In practice, there are several important differences between the two strategies. On the one hand, PP seems to be an easy and uncomplicated strategy to implement, but the unavailability of listed options with desired maturities and strike prices are major issues. SP strategies, on the other hand, can suffer from obstacles like high transaction costs and jumps in stock prices.
Detail Book of Option Based Porfolio Insurance Analysis of Protective Put and Synthetic Put Investment Strategies PDF
- Author : Felix Lütjen
- Release : 24 July 2017
- Publisher : GRIN Verlag
- ISBN : 9783668490161
- Genre : Business & Economics
- Total Page : 35 pages
- Language : English
- PDF File Size : 19,5 Mb
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