Econ 724-01 Financial Derivatives I Final Examination Instructions: 1. The test is open-book and open-notes. 2. Time allowed: 4 hours 1. Refer to the data in Table 1. a) Lau Spring 2011 Suppose you long 10 June 2011 British Pound contracts on April 26‚ 2011 (T) (at the settlement price) and you close your position on April 27‚ 2011 (W) (at the settlement price)‚ how much will you make/lose? Suppose you long 10 June 2011 British Pound contracts on April 27‚ 2011 (W) at the open and you close
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they called triad‚ is the noblest of all digits‚ as it is the only number to equal the sum of all the terms below it‚ and the only number whose sum with those below equals the product of them and itself. Three is the second triangular number and it is the only prime triangular number. Three is the only prime which is one less than a perfect square. Any other number which is n2 − 1 for some integer n is not prime‚ since it is . This is true for 3 as well‚ but in its case one of the factors is
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Direct price discrimination arises when the market can be segmented into sub populations on the basis of readily observable characteristics. Each of the segments has a different elasticity of demand and subsequently is charged a different price. Arbitrage must be prevented for this type of discrimination to be applicable. Profits are maximized by equating the marginal revenue from the two consumers for the same marginal cost. Indirect price discrimination arises when a seller cannot observe the
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CASE STUDY ASSIGNMENTS BARING BANKS AND NICK LEESON QUESTION : 1. What are the major reason behind the collapse of Barings bank? ANSWER : The major reason behind the collapse of Barings bank was caused by the largest earthquake that destroyed the part of Kobe City on 17 January 1995‚ where the Nikkei index fell sharply. This incident caused Barings Bank collapsed in 1995 due to high the loss‚ which is very far above their capital. This was due to not being able to meet the obligations of trading
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Mechanism description of Electric Iron introduction: An electric iron is a small appliance‚a handheld piece of equipment with a flat‚ roughly triangular metal surface that‚ when heated‚ is used to press clothes to remove creases. Ironing works by loosening the ties between the long chains of molecules that exist in polymer fiber materials. With the heat and the weight of the ironing plate‚ the fibers are stretched and the fabric maintains its new shape when cool. description: The electric
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proven before being accepted. 26. A geometric figure formed by three segments joining three non collinear points. 27. A line that intersects two or more coplanar lines at two or more distinct points. 28. A polyhedron with one triangular base and three triangular faces. 29. Two non adjacent angles formed by two intersecting lines. 30. A statement which is accepted as true without proof. ACROSS DOWN PROJECT IN
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traditionally covered interest arbitrage pricing relation has been rampant and that the activity in the international currency and interest rate swap markets offers a substantial explanation for the continued and prevalent wrong pricing. In essence‚ it will be clearly noted that the fixed-to-fixed currency swaps provide another form of arbitrage which can influence long-term forward exchange pricing. This paper will discuss how the violation of the traditionally covered arbitrage pricing activity is always
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This is an operational risk. It has to do with bad government. You can have internal & external government. B. Measurement of the risk ( PWP Some Traditional Risk Measures) The Greeks When you are dealing with derivatives‚ you have to use an arbitrage-free pricing model. Sensitivy
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destinations in Europe‚ Orlando‚ or New York. Customers needed to spend at least $150 to get two fee tickets‚ and it wasn’t long before customers realized that the value of the tickets were worth more than the cost of the Hoover products. It created an arbitrage opportunity for the customer and a loss leader‚ catastrophic problem for Hoover and more importantly‚ Maytag. Management underestimated the response to the promotion. Hoover expected 50‚000 responses‚ but received more than 200‚000. They expected
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FINANCIAL ENGINEERING Unit I: Introduction to Financial Engineering- Scope- Tools- Financial Engineering Vs. Financial Analysis- Factors contributing to the growth of financial engineering.- Innovative Products of the Last twenty years- present changing scenario of securities industry. Unit I: Introduction to Financial Engineering Unit I see the prescribed Text book. Unit II is OK What is Finance? • Finance is about the bottom line of business activities • Every business is a process of acquiring
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