FIFA)‚ the UEFA‚ the prices were too much high in the black market‚ approximately 10 times in comparison to the original prices. The core of the problem is not the black market prices; rather it was the increase of the original price to the last years. So what’s the problem here? Although the increase in tickets price is important‚ but when you there’s no control over the market‚ like this case‚ the original producers lose tremendously if we considered the black market prices. For instance‚ if the
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McDonald’s: Low Quality‚ High Prices? I. Background and Article Summary Its safe to say when we think of fast food‚ McDonalds certainly comes to mind. That is because the company has made a name for itself through its infamous golden arch and signature burgers. Still after 70 years‚ McDonalds is one of the largest fast food chain restaurants in the US and has growing worldwide recognition. They have reserved their title based on their huge customer base and increasing sales. The food giant has
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Assessment for Used Car Negotiation Simulation Summary My target for this negotiation was to get the car at $4‚500‚ the low end of blue book value. $4‚500 could be the net price‚ which means if seller can offer something else‚ such as maintenance service‚ parts or accessories to offset some part of the cost‚ I can accept higher price. My BATNA is to deal with other seller for similar used car. Eventually‚ I couldn’t make any deal with seller during the negotiation because he wanted to sell at $5‚000
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Ans 1: Option A Ans 2: New Required return for HR = 7% + 2*(11% -7%) = 15% New Required return for LR = 7% + .5*(11% - 7%) = 9% So difference is 6% Option E Ans 3: No of stocks = 20 Weight of each stock = 1/20 Beta of portfolio = 1.2 Beta of stock sold = 0.7 Beta of stock bought = 1.4 Hence new portfolio beta = 1.2 -.7/20 + 1.4/20 = 1.2 + .7/20 = 1.235 Option B Ans 4: New Beta = 0.7*1.5 = 1.05 Old required rate of return = 15% So old risk free rate = 15% -5%*.7 =11.5% New Required
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stock in that company. Stock options are the instruments that are offered to employees‚ allowing them to buy a certain number of shares in the company at a specific price. This price could either be lower than the current market-price of scrip-in which case their gains are immediate-or the same‚ whereupon future jumps in the share-price will show up as profits for them. There has to be a gap between the announcement of the ESOP and its coming into effect. You also have the freedom to specify how many
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3. How do your estimates compare with the actual quoted prices? Can you explain the differences? Assuming your prices are correct‚ which options would you buy or sell? Our estimates are a little different with the actual quoted prices. Why? Because some assumptions are underlying the B/S formula. 1). The stock will pay no dividends until after the option expiration date. 2). Both the interest rate‚ r‚ and variance rate‚ δ2‚ of the stock are constant (or in slightly more general versions of the
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Case study -4 MANAGERIAL FINANCE –BUS503 Professor : Rob Shah‚ MBA‚ CPA‚ CMA Course Dates : 01/12 – 03/08 Name : NAVEEN XAVIER Abstract The purpose of this paper is to summarize the Case Study The MBA Decision. This case discusses the Exotic Cuisines Employee stock options. The purpose of this paper is to Exotic Cuisines Employee stock options and make the decision that is going to be the most fiscally responsible in the long run. This decision will be achieved by answering the
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determine the in the money‚ out of the money and at the money. 2. The call option of Diamond Bhd stock has a striking price of RM30 and a cost of option RM2 per share with one month expiration date. The current market price of share is RM26. If you buy 3 lots (1 lots = 100 shares) of shares‚ calculate the profits or losses at the expiration date for each of the following prices: I. RM30 II. RM40 III. RM25 At RM30‚ SP = EP‚ ATM ‚ do not to exercise –pay only premium SP | 30 x 300
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Bond 1 Bond 2 Bond 3 Bond 4 Bond 5 1 104 4 4 4 4 2 0 104 4 4 4 3 0 0 104 4 4 4 0 0 0 104 4 5 0 0 0 0 104 The prices of the bonds are: Bond 1 Bond 2 Bond 3 Bond 4 Bond 5 Prices 102.0 102.0 101.5 96.9 100.1 Question 1.a Determine the five zero-coupon interest rates in the market. Question 1.b Price Bond A which pays 58 after 2 years and 54 after 4 years. You suspect that the prices of some of the bonds are too inaccurate‚ and decide to estimate a linear term structure of the form: nt = α 0
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FINS2624 PORTFOLIO MANAGEMENT Week 6 CAPM: The covariance of an assets returns with the market and the required return of the asset. Assumptions: * Investors are price takers * Investors have identical investment horizons * Perfect capital markets * Investors are rational mean-variance optimizers β: Measures how much risk an asset contributes in the market portfolio. * β > 1 asset contributes more risk than the average asset * β < 1 asset contributes less risk
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