The seller of an option contract has the to buy or sell the underlying asset while the buyer of an option contract has the to buy or sell the underlying asset. O Q16 Homework Unanswered O O O A right; obligation B C obligation; right Unanswered right; right D obligation; obligation 1 attempt left Submit O OF

Question Management of AG Travel and Tour has identified two groups of individuals thatwould be interested in the vacation package consisting of room and board and/orentertainment. The maximum amount that group 1 is willing to pay for room andboard is GHC 2500 and for entertainment is GHC 500. For group 2, the maximumamount they are willing to pay for room and board is GHC 1800 and forentertainment is GHC 750. Although AG Travel and Tour is not able to identifymembers of either group, it does know that each group values the components ofthe package differently. Assuming there are an equal number of members in eachgroup and that the total membership in each group is a single individual. If themarginal cost of providing the service (room and board and/or entertainment) toeach group is GHC 1000. i. How much will the hotel charge members of each group for the vacationpackage if it could identify the members in each group?ii. How much will the profit for AG Travel and Tour be? iii. Since AG…

The Financial Markets proficiency has been more inclined to interest rates productssuch as loans and term deposits in Zambia than structured products. With the adverseeconomic repercussions that countries, including Zambia experienced during theoutbreak of COVID-19, the market has moved to structured products provision such asoptions, forwards, to mention but a few. The implementation of risk mitigation strategicby most companies made the financial market to enhance structured products that aresuitable to hedge all risks arising from investments and business operations.Assuming Zambeef employees you as the Investment Hedging Director to manage theinvestment in Zambia, you approach your bank, Standard Chartered Bank to structurean option to help hedge Zambeef future shares transactions. You enter into a 5 yearscall option contract at an exercise price of K350 and paid option premium amounting toK50. Three years later, the company has an increase in operational needs and decidesto assess…

D & R A1 2 -4 Question 2. Contango and Backwardation Explain the relationship between backwardation, cost-of-carry, and convenience yield.