Option Valuation Chapter 21 Intrinsic and Time Value intrinsic value of in-the-money options = the payoff that could be obtained from the immediate exercise of the option for a call option: stock price – exercise price for a put option: exercise price – stock price the intrinsic value for out-the-money or at-themoney options is equal to 0 time value of an option = difference between actual call price and intrinsic value as time approaches expiration date‚ time value goes to zero 21-2
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Trading volatility is nothing new for option traders. Most option traders rely heavily on volatility information to choose their trades. For this reason‚ the Chicago Board Options Exchange (CBOE) Volatility Index‚ more commonly known by its ticker symbol VIX‚ has been a popular trading tool for option and equity traders since its introduction in 1993. Until recently‚ traders used regular equity or index options to trade volatility‚ but many quickly realized that this was not the best method. On Feb
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Cooling towers are a very important part of many chemical plants. They represent a relatively inexpensive and dependable means of removing low grade heat from cooling water. The make-up water source is used to replenish water lost to evaporation. Hot water from heat exchangers is sent to the cooling tower. The water exits the cooling tower and is sent back to the exchangers or to other units for further cooling. [pic] Types of Cooling Towers |[pic]
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|Option proposal | |Option name: |Docushare Software Package | |‘What do the options relate to?’ | | |Option sub-type
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Petronas Towers‚ also known as Petronas Twin Towers‚ are twin buildings situated in Kuala Lumpur‚ Malaysia‚ on the site of city’s race track. Of the two building‚ the one named Tower 1 was built by Hazama Corporation‚ while the other‚ known as Tower 2‚ was constructed by Samsung Engineering & Construction. The construction work on Petronas Towers was completed in 1998 and they were opened in August 1999. At the time of their completion‚ the twin buildings were the tallest buildings in the world and
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MiniCase 2 Blades‚ Inc. Chap 5 1. If Blades uses call options to hedge its yen payables‚ should it use the call option with the exercise price of $0.00756 or the call option with the exercise price of $0.00792? Describe the tradeoff. 2. Should Blades allow its yen position to be unhedged? Describe the tradeoff. Chap 6 1. Did the intervention effort by the Thai government constitute direct or indirect intervention? Explain. 2. Did the intervention by the
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the exchange risk associated with the award payment being dispersed in British Pounds (GBP). He originally considered a forward contract or a spot contract‚ but is now investigating how currency options could help hedge against uncertain foreign exchange exposure. The CFO needs to decide whether or not options contracts might provide some benefit to hedge the currency risk. As of 1/14/86‚ Dozier has received a 10% deposit of the total contract value of £1‚175‚000.00. At the 1/13/86 exchange rate
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Blaise Main Leaning Tower of Pisa Mrs. Carlson The Leaning Tower of Pisa is a freestanding bell tower located at the Cathedral Square in Pisa‚ Italy. It was built in three different stages over 177 year period. There has been controversy about the real identity of the architect for many years. Construction on the first floor began in August of 1173. Five years later‚ while building the third floor
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STOCK OPTIONS - AN EFFECTIVE COMPENSATION METHOD Stock Options have become the greatest form of remuneration for big names in organizations across the United States (Hall‚ 2000). The senior executives‚ who are given this option‚ can buy shares of the company at what Hall (2000) describes as the “exercise price”. They could be given “at the money”‚ “out of the money” or “in the money” price (Hall‚ 2000). Stock Options are helpful in motivating the holders to perform for the benefit of the company
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Section A: Prestcom 3-4 Section B: Industry and Competitive structure 5 Section C: Industrial forces 6 Section D: Product Evolution 7 Section E: Market Segmentation 8 Appendix 1 – Prestcom 9 Appendix 2- Direct & Indirect competitors 10 Appendix 3 – Competitive Advantage Vs Competitive Scope 10 Appendix 4 – Market share 10 Appendix 5 – Adoption life cycle 10 Appendix 6 – Porters 5 forces 11 Appendix 7 – Product Hierarchy 12 Appendix 8 – Product Life Cycle 12
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