StudentShare solutions
Triangle menu

Finance (Derivative Securities) - Essay Example

Not dowloaded yet

Extract of sample
Finance (Derivative Securities)

Industry analysis means to analyze the whole industry in which different companies relating to a single industry would be dominated, analyzed and count. Though there are number of industries currently found in the entire world and every industry has its own recognition and importance in a broad nutshell. Among number of things that come under the ambit of finance, the name of derivatives is one of them. There are different things that stride under the ambit of derivatives, like SWAP, options and forward contracts (You-lan Zhu 2004). The main perspective of this assignment is to analyze different options accordingly. Two of the questions mentioned in the case study are all about Plain Vanilla Swaps and there are two different options which have been taken into consideration for the same in total. Ans-1) European Options Option-1 K1 = 1.00 Option-2 K2 = 0.75 Option-3 K3 = 0.15 An option that can only be exercised at the end of its life, at its maturity is called European Option. European options tend to sometimes trade at a discount to its comparable American option. This is because American options allow investors more opportunities to exercise the contract. From the analysis, it is clear that the price of Option 1 is comparatively higher than that of K2 and K3 in total. An investor who buys the options on the price K1 would get loss when it moves to a place of K2 and K3 but when it is Short sell on the level of K1 then profit could be gain accordingly. The payoffs of all the options are showing that the investor would be found accordingly. Ans-2) Portfolio Buy or Sell? Amount Option-1 Sell 1$ Option-2 Buy 0.75 Option-3 Buy 0.15 It is possible to earn profit on the options accordingly. If the option-3 could be buying from a market and then sell it in the market where option 1 is trading then the chance of earning would be on a higher place. This particular strategy would be quite authentic and perfect from the standpoint of this analysis and it could be given in the same figure. References You-lan Zhu, Xiaonan Wu, I-Liang Chern. Derivative Securities and Difference Methods. Taipei: Springer, ...Show more

Summary

Introduction Accounting and finance always define somewhat different things in total because the applicability of the same could not be matched with any other thing (Beasley, M et al. 2009). Accounting is the name of recording and interpreting the data from different standpoints and there are numerous things that come under the ambit of the same…
Author : fpouros
Finance (Derivative Securities) essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Finance (Derivative Securities)"
with a personal 20% discount.
Grab the best paper

Related Essays

The usage of derivative instruments
The object of analysis for the purpose of this assignment are derivatives as a particular instrument or product the worth of which is obtained as a resultant of more than one fundamental variables referred to as an underlying asset, value associated with the reference rate and index by way of a contract.
12 pages (3000 words) Essay
Derivative Markets
Marketing is used to create, to keep and to satisfy the customer. It can be concluded that Marketing is one of the premier components of Business Management - the other being Innovation. Other services and management activities such as Operations, Human Resources, Accounting, Law and Legal aspects can be "bought in" or "contracted out".
7 pages (1750 words) Essay
Finance
GARCH effectively helps in analyzing this gap between risk and return and provides an in-depth analysis over asset pricing, portfolio optimization, option pricing and risk management (Christian Francq, 2011). GARCH model work on the assumption that randomness of the variance process fluctuates in accordance with the variance and not per its square root i.e (Chance & Brooks, 2009.
8 pages (2000 words) Essay
Finance
The investors take diversified investment strategy, where they invest their money in national as well as international investment instruments. Here the researcher tends to analyse the key mechanism of international investment diversification. The diversification process in their investments consist of different types of activities viz.
6 pages (1500 words) Essay
Derivative Investment
These models serve as a means of summarizing and exposing the mortgage contracts which are complex in nature. The models also explain the implicit options the mortgage contracts contain for borrowers. One of such options is to terminate the contract prior to maturity.
11 pages (2750 words) Essay
Finance - Fixed Income Securities
The longer the term of the interest rates the higher the interest rates will be as in comparison to short term interest rates which are mostly lower than the long term interest rates. Yield curve analysis is considered as one of the most valuable bond
6 pages (1500 words) Essay
Derivative Markets
One of the best dynamic future contracts in international market is the ‘Eurodollar future contracts’. Several investors concluded that Eurodollar futures deliver a valuable, commercial instrument for hedging variations in ‘short-term USD interest
7 pages (1750 words) Essay
Finance - Securities Analysis
Facebook users chose on categories to join depending on age, location and also interest. The main source of revenue for facebook simply depends on advertisement and also creation of application. Logging into facebook requires one to log in
4 pages (1000 words) Essay
Paper about Finance Debt, Derivative, and speculation on financial instruments
Among the many financial tools employed include debt financing, the use of financial derivatives and speculating on financial tools. The use of these tools comes with many economical advantages and also adverse sides if misused. It is
3 pages (750 words) Essay
International Securities and Finance
In line with the Uk Financial Conduct Authority, the trader was summoned to appear before the court to be charged for his crimes. Rifat acting as a professional
2 pages (500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation