Their graph is reproduced as Exhibit 12. Alternative Solutions To manage the exposure to weather risk UGG managers explored several options: 1. Retentions The retentions approach meant continuing operating as they had been and not trying to reduce their weather exposure. Retention exposed their profitability to large swings due to the weather. This option made the UGG’s financial perform will be very fluctuate. The high fluctuation is a bad news for investor. 2. Weather
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On Constructing a Market Consistent Economic Scenario Generator Ebba K. Baldvinsdóttir & Lina Palmborg March 4‚ 2011 Abstract Recently the insurance industry has started to realise the importance of properly managing options and guarantees embedded in insurance contracts. Interest rates have been low in the last few years‚ which means that minimum interest rate guarantees have moved from being far out-of-the money to expiring inthe-money. As a result‚ many insurance companies have experienced
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ECG 528 Asset Pricing Lecture 1 Prof. Antje Berndt Fall 2013 1 / 27 Overview Today • Course overview • Introduction to Derivatives Securities Buzzwords: Derivatives; Forwards; Futures; Options; Traders; Hedge funds Readings: Chapter 1 in Hull Practice problems: 1.1-1.10 Next time • Futures‚ Hedging using futures 2 / 27 Course Overview • The syllabus‚ posted on the class website‚ describes the policies and the procedures for this course. Please read it carefully.
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prices. Volatility can be characterized as historical or implied. Historical volatility measure stock price changes by using historical stock price data‚ while implied volatility is a stock’s current volatility‚ which is measured by using the stock’s option price. According to Fischer‚ volatility creates inconsistency in price trends; this results in a situation at which formulas for volatility can be changed according to the predictability of volatility. Fischer identified four factors that affect
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TABLE OF CONTENTS Page no Introduction 3 1. Employee Stock Option Plan 4 Advantages Disadvantages Examples 2. Profit Sharing 5 Advantages Disadvantages Examples 3. Gain Sharing 7 Advantages Disadvantages 4. Scanlon Plan 8 Advantages Disadvantages 5. Rucker Plan
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------------------------------------------------- Financial Management ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ASSIGNMENT ON DERIVATIVES ------------------------------------------------- ------------------------------------------------- Presentation on Derivatives -------------------------------------------------
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variable costs and companies try to hedge against any upward spikes. Although‚ it is possible to pass on these fuel surcharges to the customers‚ there is a limit to any increases in order for the firm to continue offering competitive pricing. Call options are often used as the solution and bought at a certain fuel strike price‚ to hedge against a rise in the future. If the actual price rises
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Visit Free Slides and Ebooks : http://downloadslide.blogspot.com CHAPTER 16 Dilutive Securities and Earnings Per Share ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. Convertible debt and preference shares. Warrants and debt. Share options‚ restricted share. Earnings Per Share (EPS)—terminology. EPS—Determining potentially dilutive securities. EPS—Treasury share method. EPS—Weightedaverage computation. EPS—General objectives. EPS—Comprehensive calculations. EPS—Contingent shares. Convergence
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Case Study 1. Nick Lessons sold numerous short straddles for each long futures contract he bought because he need the cash created by the premiums he received by selling the short straddles. Lesson’s needed large sums of cash to fund his margin calls‚ which forced him to sell disproportionate numbers of short straddles for each long future position he took. 2. The doubling strategy allowed Leeson’s the opportunity to recoup losses suffered ‚ which required him to double his bets in the event
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Australian School of Business School of Banking and Finance FINS 3635 OPTIONS‚ FUTURES AND RISK MANAGEMENT TECHNIQUES Course Outline Semester 1‚ 2012 Part A: Course-Specific Information Part B: Key Policies‚ Student Responsibilities andSupport Table of Contents PART A: COURSE-SPECIFIC INFORMATION 1 2 2.1 2.2 2.3 2.4 2.5 3 STAFF CONTACT DETAILS COURSE DETAILS Teaching Times and Locations Units of Credit Summary of Course Course Aims and Relationship to Other Courses Student Learning Outcomes
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