tistisSolution: Exercise 1 1. What is the difference between a long forward position and a short forward position? Ans: When the enters into a long forward contract‚ he/she is agreeing to buy the underlying asset for a certain price at a certain time in future. When the enters into a short forward contract‚ he/she is agreeing to sell the underlying asset for a certain price at a certain time in future. 2. Explain carefully the difference between hedging‚ speculation‚ and arbitrage. Ans:
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CASE STUDY ROBIN-HOOD ANALYSIS By: Aditi Gupta Executive Summary This case study is about Robin Hood and his Marrymen’s run-ins with the Sheriff of Nottingham. In the second year of revolt of Robin against Sheriff‚ with large numbers of recruits‚ pouring in‚ from every corner of England‚ Robin met his objective of strengthening man force. Although he was satisfied with the strength of the band‚ he realized resources and funds are insufficient to meet the needs of the organization‚ but they
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Chapter 1 to 3 Chapter 9 Revision on Financial Derivatives & Properties of Options Prices • What are financial derivatives? What are their roles in finance? • Give examples of derivatives and draw their profit diagrams. • Name some financial derivatives that are traded in Bursa Malaysia. 2 • Definition A financial instrument that has a value determined by the price of something else Risk management. Derivatives are tools for companies and other users to reduce risks Speculation
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Introduction Robin Hood formed a band of Merry Men with other men who were also disgruntled over the Sherriff’s administration. As word spread of Robin Hoods’ alliance across England‚ many raced to join the rapidly expanding organization. While Hood was satisfied with the increasing size of the band‚ he was also concerned because he was not prepared to accommodate the new members of the band. The cost of buying more food and resources was starting to drain the bands financial reserves‚ during which
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CO www.hbr.org What Is Strategy? by Michael E. Porter Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 2 What Is Strategy? 21 Further Reading A list of related materials‚ with annotations to guide further exploration of the article’s ideas and applications Reprint 96608 This document is authorized for use only by James Co in Food and Agribusiness Strategic Management (F12) taught
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$50. The stock pays a dividend of $5 in 3 months. A 6-month European put option on the stock has a strike price of $48 and a premium of $4.38. The continuously compounded interest rate is 8%. Calculate the premium for a 6-month European call option on the stock with a strike price of $48. * A 1.02 * B 3.36 * C 3.46 * D 4.38 * E 5.40 2 1. An "exchange call option" gives the owner of the option the right to give up one share of Stock A in exchange for receiving one share
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Strategic Management BM3310 \ Student Name : Kim Heejun Student I.D.: 607-1213-02 Programme: BABHM Today’s dynamic markets and technologies have called into question the sustainability of competitive advantage. Under pressure to improve productivity‚ quality‚ and speed‚ managers have embraced tools such as TQM‚ benchmarking‚ and reengineering. Dramatic operational improvements have resulted‚ but rarely have these gains translated
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Question 1: Consider an option on dividend-paying stock when stock price $30‚ the exercise price is $29‚ the risk-free interest rate is 5% p.a.‚ the volatility is 25%p.a. and time to maturity is 4 months. Assume that the stock is due to go ex-dividend in 1.5 months. The expected dividend is 50cents. a. b. c. what is the price of the option if it is a European call? What is the price of the option if it is a European put? Use the results in the Appendix to this chapter to determine whether there
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Strategic Groups * “the group of firms in an industry following the same strategy along the same strategic dimensions” (Porter‚ 1980) * “a set of firms competing within an industry on the basis of similar scope and resource commitments” (Cool & Schendel‚ 1968) Competitive strategy = a choice of which strategic group to compete in = the choice of the easiest group to ‘get into’ Strategic groups are organisations within an industry with similar strategic characteristics‚ following similar
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STRATEGY AND STRATEGIC MANAGEMENT What is Strategy? A strategy is a long-term approach to implementing a firm ’s business plans to achieve its business objectives. It is also defined as the art and science of planning and marshalling resources for their most efficient and effective use. However‚ Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows: "Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization
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