the story of options and the development of the Black-Scholes formula is intertwined with the story of international financial markets and investment and global financial crisis. Although B-S was originally developed for pricing stock options, the formula that we have been using in class for currency options is virtually identical. Specifically, except for the Tr e − * term that discounts by the foreign interest […]

One typical characteristic differentiating U.S. public policy compared to Europe is that U.S. governments often use tax incentives rather than explicit government programs to pursue particular policy goals (which include providing pensions, medical insurance, home ownership, or private investment). For example, European governments might provide larger government pensions for retirees where the U.S. might provide modest government pensions through Social Security and then encourage firms […]

Use the SimQuick (http://simquick.net) Excel file to complete “Exercise 1 (u01a1): A Bank” found on pg 33 of the SimQuick 3/e booklet.  The Excel file that is needed to run the “Unit-1:  u01a1 Bank Process Simulation”.  Run 100 simulations and report the results for; 1, 2 & 3 Tellers as illustrated on pg 32.  Complete only “part-a” for this activity and summarize your findings, along with a recommendation, […]

One specialized type of security is called an equity futures. This is a contract that guarantees you a share of a particular company to be delivered to you not today, but sometime in the future, at a price that is determined by the market right now. This price is usually called the futures price of the stock (note – the term is plural – “futures”). […]

Use your company or select a public company, and analyze the methods of operational and financial leverage that should be considered in determining whether to acquire another organization. Financial leverage includes internal financing, equity financing, bond financing, reducing dividends to increase internal cash flow, and using leasing to acquire capital assets with more leverage, thus conserving cash flow.  Operational leverage should discuss the appropriate cost […]

1. At http://finance.yahoo.com/ search the PepsiCo (PEP) and IBM (IBM) Profile, and then review the Balance Sheet and the Profit and Loss Account for each company. Calculate the current value of interest tax savings that contributes to your long-term debt. Now suppose that each issues $ 3 trillion more of long-term debt and that they use the proceeds to repurchase equity. What change would fiscal savings experience? […]

choose a publicly traded company and identify one of its products that the group will analyze. Describe the strategic implications that would need to be considered in setting a price for that product, and determine whether you would use a market-based pricing approach or a cost-based pricing approach to setting the product price. Explain the rationale behind choosing the pricing approach. Identify the costs that […]

Part 1 Create Section 6 of your Supply Chain Process Improvement Proposal: Measurement and Management. •Describe how supply chain performance is measured, presenting the various measures used in each organization or function. Part 2 Create Section 7 of your Supply Chain Process Improvement Proposal: Global Supply Chain. •Describe international trade and the supply chain role in globalization as it applies to the organization you have […]

Bonds and Risk   Write a 750-1000 word paper.  In your paper include the following: •Research your organization and assess whether or not the organization has outstanding bonds payable or has invested in bonds from another organization. Do you support their choice to use bonds for financing or investment purposes? Why or why not? What benefits and risks do bonds present versus other forms of financing? […]

 Assume you are planning to start a new business that will sell  innovative consumer products via an online store.  You will be pitching  your idea to potential investors with the goal of securing funding.   Your investors are very savvy and want to review a well thought out  financial forecast.  Using the examples provided in Chapter 6, construct  a hypothetical 5 year Cash Flow estimate including […]