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  3. question 4) bbs structured products plc (bbs sp pl

QUESTION 4) BBS Structured Products plc (BBS SP plc) is offering a 12 month structured...

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QUESTION 4) BBS Structured Products plc (BBS SP plc) is offering a 12 month structured deposit product where the original investment is fully protected, whilst also providing you with potential of a higher return up to a maximum of 8%. The potential for higher return is linked to the share price of HSBC plc at the end of the deposit term (what happens before expiry doesn't matter). HSBC's current share price is 65. The current 12-month GBP interest rate is 0.8% The deposit return is as follows: 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 1% 6.3 6.7 HSBC closing price (f) You will need the following option price information to answer the question Type Call Call Put Digital Call Digital Call Maturity 12-months 12-month:s 12-months 12-months 12-months Strike 6.30 6.70 6.70 6.70 6.30 Premium 0.42 0.24 0.49 36% of payout 54% of payout

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