LECTURE 4 Investment under uncertainty‚ real options Derivatives valuation approach. Example: Copper mine Strategic options. Examples: Copper mine with shutdown option Valuing Vacant Land Valuation of an option to delay Ratio comparison approach Additional Definitions ECOM051 Business Finance‚ Lecture 4 (Dr Giles Spungin‚ G.Spungin@qmul.ac.uk‚ www.excalibur24.com‚ QMUL©2010-11) 1 Discounted cash flow methods ignore opportunities (strategic options
Premium Futures contract Derivative
EXC3613 Risk Management with derivatives Geir Høidal Bjønnes geir.bjonnes@bi.no 1 Introduction • Learning objectives: 1. 2. 3. 4. What is a derivative? What is the role of Derivatives and Derivatives Markets Firms’ risk exposures Hedging price risk with derivatives • McDonald: Chapter 1 2 Example • Consider a farmer that grows wheat and is expecting to yield 10‚000 bushels of crop in 3 months. He is afraid that the price of wheat might drop at the period
Premium Futures contract Derivative Option
JEE (Main) 2013 Analysis JEE (Main) 2013 A Detailed Analysis by Resonance OVERALL MARKS DISTRIBUTION Corporate Address: CG Tower‚ A-46/A-52 Jhalawar Road‚ Near City Mall‚ Kota 324005 (Rajasthan) Phone: 0744-319222 | Email: contact@resonance.ac.in | Website: www.resonance.ac.in | WAPSite: m.resonance.ac.in JEE (Main) 2013 Analysis OVERALL DIFFICULTY LEVEL ANALYSIS Difficulty Level Overall 1.83 Physics Mathematics Chemistry 2.10 1.63 1.77 Corporate
Premium Physics Calculus Chemistry
---------------- 9 INTRODUCTION: Derivatives have been traded for centuries‚ with early examples including tulip bulb options in Holland and rice futures in Japan during the 17th century. But futures markets were relatively small until the 1970s when developments in pricing methodology spurred spectacular growth. The derivatives market has grown 100-fold over the past 30 years‚ with estimates of the current size of the market at
Premium Futures contract Derivative Forward contract
Calculus is the mathematical study of change‚[1] in the same way that geometry is the study of shape and algebra is the study of operations and their application to solving equations. It has two major branches‚ differential calculus (concerning rates of change and slopes of curves)‚ and integral calculus (concerning accumulation of quantities and the areas under curves); these two branches are related to each other by the fundamental theorem of calculus. Both branches make use of the fundamental
Premium Derivative Calculus
n calculus‚ Rolle’s theorem essentially states that a differentiable function which attains equal values at two distinct points must have a point somewhere between them where the first derivative (the slope of the tangent line to the graph of the function) is zero. ------------------------------------------------- Standard version of the theorem [edit] If a real-valued function f is continuous on a closed interval [a‚ b]‚ differentiable on the open interval (a‚ b)‚ and f(a) = f(b)‚ then there
Premium Calculus Derivative Function
= 717.25% ≈ 717% (3sf) OTHER STANDARD TAYLOR SERIES EXPANSIONS FOR DIFFERENT FUNCTIONS 1. Logarithmic Functions 2. Hyperbolic Functions NON STANDARD TAYLOR SERIES EXPANSIONS It is easy to take derivatives of Taylor series: Just take the
Premium Derivative Calculus
1) Find the x coordinates of all relative extreme points of[pic]. |A)[pic] |B) [pic] |C) [pic] |D) [pic] |E) [pic] | [pic] First find the derivative of the function[pic]‚ f ’(x): |[pic] |= |[pic] |apply power rule of differentiation | | |= |[pic]
Premium Function Calculus Derivative
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
Premium Futures contract Derivative Final examination
Newton developed the use of calculus in his laws of motion and gravitation.• Astronomical science deeply depend on calculus.• Space technology use calculus in many ways.• Calculus is used to build tracks. 8. Calculus in Economics• Functions and derivatives of calculus are relate to relevant concepts in economics.• Economic research uses calculus functional relationships‚ relation of income ‚ market prediction etc.• Differentiation is used to find optimum solutions of economics.• Calculus also used
Premium Maxima and minima Calculus Isaac Newton