Ravi buys 10,000 shares of FPS Ltd. @ ₹22 per share and obtains a complete hedge of shorting 400 Nifties at ₹1,100 each. He closes out his position at the closing price of the next day at which point the shares of FPS Lt

CS Professional · Financial, Treasury and Forex Management · PYQS · June 2014
Ravi buys 10,000 shares of FPS Ltd. @ ₹22 per share and obtains a complete hedge of shorting 400 Nifties at ₹1,100 each. He closes out his position at the closing price of the next day at which point the shares of FPS Ltd. have dropped by 2% and the nifty future has dropped by 1.5%. What is overall profit or loss of this set of transactions?

Topics: Derivatives and Hedging

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