contract‚ the derivatives are settled at a future date. Role of Financial Derivatives. We can classify financial derivatives based on different parameters. The most common are: 1. Derivatives according to the type of contract involved: a. Options. b. Forwards. c. Contracts for difference. d. SWAPS. 2.
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P17-1. (Debt Securities) 2 Presented below is an amortization schedule related to Spangler Company’s 5-year‚ $100‚000 bond with a 7% interest rate and a 5% yield‚ purchased on December 31‚ 2012‚ for $108‚660. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds 12/31/12 $108‚660 12/31/13 $7‚000 $5‚433 $1‚567 107‚093 12/31/14 7‚000 5‚354 1‚646 105‚447 12/31/15 7‚000 5‚272 1‚728 103‚719 12/31/16 7‚000 5‚186 1‚814 101‚905 12/31/17
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CHAPTER 17 Investments ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. Questions Brief Exercises Exercises Problems Debt securities. 1‚ 2‚ 3‚ 13 1 (a) Held-to-maturity. 4‚ 5‚ 7‚ 8‚ 10‚ 13‚ 21 1‚ 3 (b) Trading. 4‚ 6‚ 7‚ 8‚ 10‚ 21 4 (c) Available-for-sale. 4‚ 7‚ 8‚ 9‚ 10‚ 11‚ 21 2‚ 10 4 1‚ 2‚ 3‚ 4‚ 7 1‚ 2‚ 3 3‚ 4‚ 5 Concepts for Analysis 1‚ 2‚ 3 1‚ 2‚ 3‚ 5 4‚ 7 1‚ 7 4 1‚ 4 1‚ 4 2. Bond amortization
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is planning to sell off his entire family stake to WCB and consider the fairness of the price. Minor shareholder: Two options provided to the minor shareholders for decision making on their shares. Option 1: Sell off the shares The shareholders whose are risk adverse and look for short term investment should sell off the shares to generate the profit on investment. Option 2: Hold the shares for future growth The shareholders whose are risk taker and look for higher profit on investment can
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Active &Passive Portfolio – Call/Put Options and Futures This report will document the active traded portfolio held from Friday (July 18th‚ 2014) until Monday (August 11th‚ 2014). In this portfolio‚ the two portfolio managers traded call options and put option for the stocks on the S&P 500‚ as well as futures contracts in many different asset classes (commodities‚ currencies‚ indexes and so on). Trades were made at the end of each week and Monday (August 11‚ 2014)‚ resulting in four trading days
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Debt funds invest in fixed income instruments‚ such as bonds‚ commercial papers‚ certificates of deposit and treasury bills. These instruments are safer than equities‚ but are not completely free from risks. The main factors that impact the value of debt instruments are interest rates‚ exchange rates‚ inflation and policies of the central bank. Apart from these‚ a weakening of credit rating of the issuer is also a source of risk for non-government debt papers. Let us look at some of the strategies
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Case: Tiffany & Co- 1993 (HBS 298-014) Assignment Questions 1. In what way(s) is Tiffany exposed to exchange-rate risk subsequent to its new distribution agreement with Mitsukoshi? How serious are these risks? Answer: About 15% of (1992) sales of $492mln or ~ $75mln will now be earned in Yen‚ but will have to be reported in $. At a Net Income (1992) of $25mln‚ the risks caused by this exposure are significant. Data from exhibit 6 shows that in a 6-month period (Apr-Sep) exchange
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FLEXIBILITY 7 3.0 CONCLUSION 8 4.0 RECOMMENDATIONS 8 5.0 REFERENCE LIST 10 6.0 APPENDICES 12 6.1 APPENDIX 1 – Adjusted NPV (ANPV) 12 6.2 APPENDIX 2 – Stock Pricing 13 6.3 APPENDIX 3 – Black-Scholes-Merton Option Pricing Model (Put Option) 15 6.4 APPENDIX 4 – Black-Scholes-Merton Option Pricing Model (Financial
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CHOOSING THE RIGHT SECURITY INVESTMENTS Page 1 Choosing the Right Security Investments and Awareness of All Available Options CHOOSING THE RIGHT SECURITY INVESTMENTS Page 2 Subject: Information of the different categories of security investments and the way of figuring out what security investment is right for you. 1) What kind of questions you must ask yourself before finalizing your decision of investing in a security? You must know why you are investing
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FAILURE IS NOT AN OPTION FAILURE IS NOT AN OPTION - Gene Kranz‟s leadership in movie < Apollo 13> INTRODUCTION Apollo 13‚ the 1995 motion picture directed by Ron Howard‚ is the true story of Jim Lovell‚ Fred Haise‚ and Jack Swigert‚ a team of astronauts reassigned to a space flight with diminished preparation time. Apollo 13 Mission in 1970 was planning to land on the moon as a routine‚ but after astronauts found oxygen tank‟s explosion and leaking‚ this routine mission to the moon suddenly
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