...money than ever as prices for stock skyrocketed. When the stock market reached its peak, it seemed as though the market had nowhere to go but up. People in America didn't expect the stock market to fall and when it did they had no idea what to do so they withdrew all their investments which caused the stock market to crash. The fall of the stock market caused 30% of the nation’s workforce into unemployment and debt, forcing the country into a Great Depression. During the twenties many people were getting rich using buy and sell methods in the stock market, this caused the stock market to rise, and shares to become more expensive for the average buyer. Most American...
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...DARA’S DILEMMA Based on the details provided in the case, the major problem seen, in this case, is the Dara's dilemma regarding whether to hold the stocks of Casinos International or sell them. If she sells the shares now, the can earn $54 per share. In other case, if she holds the stocks and the company get the permission to open the floating casino, then she can sell it for $60 per share while in the worst scenario, the price of the stock will fall together with the bearish market. Alternative 1: Investing in the IPO of Tech Company could be a good decision unless there is a good possibility of growth in the market. This investment could be the profitable as the technology companies are growing rapidly. They can earn good profits and the profit margins in these types of companies are good. NewestHighTech.com has received early financing, and it has found its new client who is using its chip to manufacture the cell phones. Therefore, in this situation this can be a profitable investment. Nevertheless, if the economy is going to face the downturn, then the investment could be the nightmare. The tech industry will be hit hard in case the economy faces recession. The mobile phones sales will be reduced as the result of which the company's chips sale will be affected leading to low profit. Alternative 2: The alternative of buying the Casinos stock remains to be the midpoint. The stocks can go high if the court grants the permission for the floating casino. If the permission...
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...FRA • Future contracts and forward rate agreement (FRAs) are called derivatives because they derive their price form an underlying physical market product • A futures contract is the right to buy or sell a specific item at a specified future date at a price determined today • The risk management function of a derivative-based strategy is to lock-in price today that will apply at a future date. • Two main types of derivative contracts 1. commodity (e.g. gold, wheat and cattle) 2. Financial (e.g. shares, government securities and money market instruments) Hedging using futures contracts • Hedging involves transferring the risk of unanticipated changes in prices, interest rates or exchange rates to another party • The change in the market price of a commodity or security is offset by a profit or loss on the futures contract • Derivative contracts enable investors and borrowers to protect assets and liabilities against the risk of changes in interest rates, exchange rates and share prices • Basic futures strategy rule: conduct a transaction in the futures market today that corresponds with the proposed physical market transaction due at a later date. ***Example: A farmer wants to sell wheat in a couple of months, but is concerned that the price is going to fall in the mean time. How can the farmer hedge...
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...Shrikhande International Finance Fall 2010 Problem Set 1 Chapter 7 1. The $:€ exchange rate is €1 = $0.95, and the €:SFr exchange rate is SFr 1 = € 0.71. What is the $:SFr exchange rate? Answer. SFr 1 = € 0.71 x $0.95 / € = $0.6745. 2. Suppose the direct quote for sterling in New York is 1.1110-5. How much would £500,000 cost in New York? What is the direct quote for dollars in London? Answer. £500,000 cost £500,000 x $1.1115/£= $ 555,570. The direct quote for the dollar in London is just the reciprocal of the direct quote for the British pound in New York or 1/1.1115 - 1/1.1110 = 0.8997-0.9001. 3. Suppose the quote on British pounds is $1.624-31. a. If you converted $10,000 to British pounds and then back to dollars, how many dollars would you end up with? Answer. For $10,000, you would buy pounds at the price of $1.631, giving you £6,131.21 ($10,000/1.631) and resell them at the bid price of $1.624. The latter transaction would yield $9,957.08, resulting in a round-trip cost of $42.92. b. Suppose you could buy pounds at the bid rate and sell them at the ask rate. How many dollars would you have to transact in order to earn $1,000 on a round-trip transaction (buying pounds for dollars and then selling the pounds for dollars)? Answer. For every pound you could buy at the bid and sell at the ask, you would earn the spread of $0.007. To earn $1,000, you would have to transact £142,857.14 ($1,000/$0.0007). At the current bid rate of...
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...catalogue record for this book can be obtained from the British Library. All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publisher. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published without the prior written consent of the Publisher. Printed in the UK by CPI Antony Rowe, Chippenham No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this book can be accepted by the Publisher, by the Author, or by the employer of the Author. Designated trademarks and brands are the property of their respective owners. Contents About the Author Acknowledgements Foreword Preface Introduction Part One: Stop Orders in Theory (the Tools) 1. Orders, Stop Orders and their Many Flavours 2. Stop Order to Sell 3. Stop Order to Buy 4. Trailing Stop Order to Sell 5. Trailing Stop Order to Buy 6. Guaranteed Stop,...
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...Copyright © 2009 by National Stock Exchange of India Ltd. (NSE) Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 INDIA All content included in this book, such as text, graphics, logos, images, data compilation etc. are the property of NSE. This book or any part thereof should not be copied, reproduced, duplicated, sold, resold or exploited for any commercial purposes. Furthermore, the book in its entirety or any part cannot be stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise. Preface The National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is today the largest stock exchange in India and a preferred exchange for trading in equity, debt and derivatives instruments by investors. NSE has set up a sophisticated electronic trading, clearing and settlement platform and its infrastructure serves as a role model for the securities industry. The standards set by NSE in terms of market practices; products and technology have become industry benchmarks and are being replicated by many other market participants. NSE has four broad segments Wholesale Debt Market Segment (commenced in June 1994), Capital Market Segment (commenced in November 1994) Futures and Options Segment (commenced June 2000) and the Currency Derivatives segment (commenced in August 2008). Various products which are traded on the NSE include, equity shares, bonds, debentures, warrants, exchange...
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...Amazing Autumn The most amazing season of the year is autumn, or as most southerners call it fall. Fall is the time of year when football comes on, the leaves change, bonfires are in full swing, and anything pumpkin and apple is selling. The anticipation of all the little trick-or-treaters, and knowing that family will be around in just a few short weeks makes the heart warm from the inside out. Fall brings Thanksgiving, Halloween, and much more, it also starts to bring everyone’s heart out. Everyone has a bigger heart it seems when fall comes and makes it appearance for a few months, after that it leaves one longing for it until it comes back around. Fall is full of wonderful things that make the season what it is. At the beginning of an East Tennessee fall, all which is heard is “Go big orange!’ All people want to see are the mountains’ trees changing from the bright green and dull green colors into reds, oranges, yellows, and some deep purples. The changing of the leaves’ color and the yelling of Tennessee Volunteer fanatics are how one will know the wonderful season fall is upon us. When fall arrives, Starbucks starts to sell pumpkin spice lattes, and Wal-Mart sells pumpkins to carve. Some will start to see women and men drinking the hot and delicious pumpkin spice lattes and children planning what to carve on their pumpkins. With children planning to carve pumpkins, people will start to see the pumpkins with rather menacing, and some humorous, faces carved into them...
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...bringing me out the dark Finally I can see you crystal clear [Clean version:] Go 'head and sell me out and I'll lay your ship bare [Explicit version:] Go 'head and sell me out and I'll lay your shit bare See how I leave with every piece of you Don't underestimate the things that I will do There's a fire starting in my heart Reaching a fever pitch And it's bringing me out the dark The scars of your love remind me of us They keep me thinking that we almost had it all The scars of your love, they leave me breathless I can't help feeling We could have had it all (You're gonna wish you never had met me) Rolling in the deep (Tears are gonna fall, rolling in the deep) You had my heart inside of your hand (You're gonna wish you never had met me) And you played it, to the beat (Tears are gonna fall, rolling in the deep) Baby, I have no story to be told But I've heard one on you And I'm gonna make your head burn Think of me in the depths of your despair Make a home down there As mine sure won't be shared (You're gonna wish you never had met me) The scars of your love remind me of us (Tears are gonna fall, rolling in the deep) They keep me thinking that we almost had it all (You're gonna wish you never had met me) The scars of your love, they leave me breathless (Tears are gonna fall, rolling in the deep) I can't help feeling We could have had it all (You're gonna wish you never had met me) Rolling in the deep (Tears are gonna fall, rolling in...
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...Copyright © 2009 by National Stock Exchange of India Ltd. (NSE) Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 INDIA All content included in this book, such as text, graphics, logos, images, data compilation etc. are the property of NSE. This book or any part thereof should not be copied, reproduced, duplicated, sold, resold or exploited for any commercial purposes. Furthermore, the book in its entirety or any part cannot be stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise. Preface The National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is today the largest stock exchange in India and a preferred exchange for trading in equity, debt and derivatives instruments by investors. NSE has set up a sophisticated electronic trading, clearing and settlement platform and its infrastructure serves as a role model for the securities industry. The standards set by NSE in terms of market practices; products and technology have become industry benchmarks and are being replicated by many other market participants. NSE has four broad segments Wholesale Debt Market Segment (commenced in June 1994), Capital Market Segment (commenced in November 1994) Futures and Options Segment (commenced June 2000) and the Currency Derivatives segment (commenced in August 2008). Various products which are traded on the NSE include, equity shares, bonds, debentures, warrants, exchange...
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...Project Report On “DERIVATIVES – THE BEST TOOL IN INDIAN MARKET TO GET THE OPTIMUM RETURNS” ACKNOWLEDGEMENT We take this opportunity to place on record our grateful thanks & sincere gratitude to those who gave us valuable advice & inputs for our studies. Our study could not have been completed if we had not have been completed if we had not been able to get the reference material from the company. Whenever & whatever we present today has been made possible by true efforts & kind support of our project guide Mr. Akhilesh Rathi, Head, SNR Securities & Finance, Indore. We express our sincere regards & feel paucity of word to express our utmost gratitude toward him for providing us the necessary resources, worthwhile suggestions & constant guidance. We also like to express our thanks towards other staff members of SNR Securities & Finance who inspired us to put in our best efforts for the completion of the project. PREFACE Financial system is the mirror reflection of an economy. The performance of any economy to a large extent is dependent on the performance of the Financial Institution. Financial system plays an important role by mobilizing saving and allocating them to the most profitable activities, and enables society to make more productive use of its scarce resources. The Financial system consist of many institution, instruments, and markets. Financial Institution range from moneylender to banks, pension funds, insurance...
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...fundraiser is being established to help raise funds needed to defray some of the costs associated with cheerleading, such as shoes, mats, equipment, trips, and regional and national cheer competitions. Sponsorship in the Falcon Cheer organization is given on a year-to-year basis and will take the form of three standard sponsorship packages. The sponsorship levels are as follows: Panther Silver: Name of sponsor is added to our 2012-2013 sponsor tee-shirts, which the cheerleaders Min. $50.00 will wear during various events of our fall and spring seasons. Tee shirts will also be given away during our fall season to patrons at Gadsden sporting events. Panther Gold: Name of sponsor with logo on the back of our 2012-2013 sponsor tee shirts. Thank you Min. $125.00 poster from the cheerleaders with free advertisement space. The poster will include a free business card size advertisement of your business. The posters will be handed out to various local businesses for display. Panther Platinum: Name of sponsor with logo high on the back of our 2012-2013 sponsor tee shirts, Min. $200.00 a thank you poster from the cheerleaders with free advertisement space (two business cards in size), and two homecoming tickets for the 2012 Gadsden Homecoming game. The parents, cheerleaders, and coaching staff sincerely appreciate your taking the time to consider being a...
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...regime – allows the currency to appreciate gradually over time but within a range established by the government o Pegged rate – currency directly linked to another country Discuss participants in the FX markets o FX dealers and brokers o Central banks – influence exchange rate, change composition of holdings of foreign currencies in managing official reserve assets, purchase foreign currency to pay government imports and interest on or redeem government debt o Firms conducting international trade o Exporters – sell foreign currency and buy AUD o Importers – buy foreign currency and sell AUD o Investors and borrowers in the international money markets and capital markets – investing overseas o Foreign currency speculators – anticipate future rates to make a profit o Arbitrageurs – no risk exposure; o Geographic – taking advantage of when two dealers in different locations quote different rates on same currency o Triangular – taking advantage of when 3 or more currencies are out of alignment Describe the functions and operations of FX markets o Operates 24 hrs a day o Typically the same rates globally (no arbitrage profits available) o Sophisticated global telecommunication systems utilised Outline instruments traded in FX markets o Spot transactions – set an exchange rate today for delivery and settlement in 2 business days o Forward FX transactions – set an exchange rate today for delivery and...
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...DERIVATIVES Introduction A derivative is a contract between two parties to trade an underlying asset at a date in the future. Derivatives are used to control risk. They can be used to reduce risk (known as hedging), or to increase risk (known as speculation) in order to enhance returns. 1 Futures Introduction A futures contract is a standardised, legally binding, marketable agreement to trade a specified asset on a specified date in the future at a specified price. The futures contract will specify the details of the transaction, with particular regard to: • Price • delivery date • type of asset to be delivered • quantity of asset to be delivered • minimum quality of asset to be delivered o this factor is important for commodity futures Note that, the ‘price’ of the future is the specified amount that is paid by the buyer to the seller on the delivery date. No money passes from the buyer to the seller at outset. Types of futures contracts Futures contracts were originally based on commodities (e.g. sugar, wheat, gold), and have been traded since the 18th Century. However, financial futures have been traded on the Chicago Board of Trade (CBOT) since 1972 and London International Financial Futures and Options Exchange (LIFFE) since 1982. In practice, futures contracts are settled ‘for cash’, rather than by the delivery of the underlying asset. The cash settlement is the difference between the price of the underlying...
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...cream. The law of supply states that a rise in the price of a good induces an increase in the quantity supplied, while the law of demand states that a rise in the price of a good induces a decrease in the quantity demanded. Ultimately, these laws are used to predict which direction supply and demand curves shift, which for this scenario can be due to weather changes, the specific days of the week, and sudden decreases in the supplies used to make ice cream. In the case that the school allows another student to sell ice cream on campus as well, the price of ice cream would fall due to increased competition. The owner of the small ice cream stand on campus is known to have experienced fluctuations in the daily sales of ice cream. One reason to explain this is due to the constantly changing weather. On warmer or hotter days, there is a greater demand for ice cream because people eat it in order to cool off. Due to this greater demand, Ice-Campusades is likely to sell out all of their ice cream before the day is over. In terms of the supply and demand graphs, the demand curve shifts to the right, while the supply curve remains unchanged. On the other hand, if the weather on any given day is relatively cold or chilly, there is less demand for ice cream because students want to stay warm and consume hotter...
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...Chapter 12 ECN211 Multiple Choice Study Questions Page 150 Chapter 12 General Multiple-Choice Questions 12.1 Money promotes efficiency because it A. reduces the search costs associated with finding a trading partner. B. encourages specialization by enabling trade (instead of production by everyone for his own use). C. reduces the information costs associated with trade, such as having to learn prices for several items. D. all of the above E. none of the above Money, according to our definition, A. has to be backed by something valuable, such as gold or silver. B. does not have to be generally accepted in payment of obligations. C. can include credit. D. has to be issued by government. E. none of the above. Money, according to our definition, A. need not be in common use. B. is generally accepted to pay debt. C. has to be issued by government. D. does not need to be useful to pay off obligations. E. needs to be backed up by gold. Which of the following has (have) functioned as money? A. gold B. tobacco C. rocks Money has to be based on, backed by, or redeemable in A. tobacco B. gold C. silver E. none of these D. cattle D. stocks E. all of these 12.2 12.3 12.4 12.5 12.6 Which of the following is not a function of money A. Unit of Account B. Medium of Exchange (Means of Payment) C. Store of Value D. Provider of Peace and Security E. Standard of Deferred Payments Which characteristics would not be especially important or practical for the thing used as money...
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