TABLE OF CONTENTS Page no Introduction 3 1. Employee Stock Option Plan 4 Advantages Disadvantages Examples 2. Profit Sharing 5 Advantages Disadvantages Examples 3. Gain Sharing 7 Advantages Disadvantages 4. Scanlon Plan 8 Advantages Disadvantages 5. Rucker Plan
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paper analyzing the risk exposure and risk management of a company or industry. Guidelines for this research project are given at the end of this syllabus. Course Subject and Objectives This course focuses on forward contracts‚ futures contracts‚ options and swaps. By the end of the term students will learn how these contracts work‚ how they are used for risk management‚ and how they are priced. This subject belongs to the field of quantitative finance and traditionally it is referred to as “financial
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HEC Paris Financial Markets Spring 2012 Final Exam “Cheat Sheet” 0. Basic Statistics (a) Consider an n-outcome probability space with probabilities p1 ‚ p2 ‚ . . . ‚ pn . Consider two discrete random variables X and Y with outcomes (X1 ‚ X2 ‚ . . . ‚ Xn ) and (Y1 ‚ Y2 ‚ . . . ‚ Yn ). 2 The we have the following formulas for means (µX ‚ µY )‚ variance (σX )‚ standard deviation (σX )‚ covariance (σX‚Y )‚ and correlation (ρX‚Y ) µX = EX = E(X) = p1 X1 + p2 X2 + · · · + pn Xn µY = EY = E(Y ) =
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References: Batchvarov‚ Alexander and Nicolas Gakwaya (2006)‚ “Principles and Structures of Islamic Finance‚” Merrill Lynch‚ European Structured Finance –ABS (8 September)‚ London. Black‚ Fischer and Myron Scholes (1973)‚ “The Pricing of Options and Corporate Liabilities‚” Journal of Political Economy‚ Vol. 81‚ No. 3‚ 637-54. El-Qorchi‚ Mohammed (2005)‚ “Islamic Finance Gears Up‚” Finance and Development‚ International Monetary Fund (IMF)‚ Vol. 42‚ No. 4 (December)‚ 46-9. Iqbal‚ Zamir and
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Problem go to solution Business‚ Finance - Year 2 What is the bond ’s conversion ratio? What is the bond ’s conversion value? What is the bond ’s straight-debt value? The following data apply to Saunders Corporation ’s convertible bonds: Maturity 10 Stock Price $30.00 Par Value $1‚000 Conversion Price $35.00 Annual Coupon 5% Straight-Debt Yield 8% 1) What is the bond ’s conversion ratio? A. 27.14 B. 28.57 C. 30.00 D. 31.50 E. 33.08 2) What is the bond ’s conversion value? A. $698.15 B. $734
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1. Use the data given to calculate annual returns for Goodman‚ Landry‚ and the Market Index‚ and then calculate average annual returns for the two stocks and the index. (Hint: Remember‚ returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss‚ adding the dividend to the capital gain or loss‚ and then dividing the result by the beginning price. Assume that dividends are already included in the index. Also‚ you cannot calculate the rate of return
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E14‚ Page 549: Solution: You would buy the American call for $75‚ exercise the call immediately in order to purchase a share of Pintail stock for $50‚ and then sell the share of Pintail stock for $200. The net gain is: $200 – ($75 + $50) = $75. If the call is a European call‚ you should buy the call‚ deposit in the bank an amount equal to the present value of the exercise price‚ and sell the stock short. This produces a current cash flow equal to: $200 – $75 – ($50/1 + r) At the
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oyment incomeEMPLOYMENT INCOME Source of Employment Income The basis of taxation on employment income is that income from exercising an employment in Malaysia is regarded as Malaysian derived income. All income attributable to the employment exercised in Malaysia is subject to Malaysian tax irrespective of where the remuneration is paid. Where an employee is required to perform his duties outside Malaysia‚ the entire remuneration is still chargeable to Malaysian tax if the services rendered outside
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2009 Shweta corporation purchased 10‚00‚000 of its fully paid shares at Rs 22 per share. On 20th January 2009 the company sold 5‚00‚000 of the treasury stock at Rs 25 and on 8th February 09 the rest of treasury stock issued to employees under stock option scheme at an exercise price of Rs 15 each. Show the journal entries to record the transactions. 3. In the year 2004 Shweta corporation issued 100‚00‚000 shares at Rs 14 each that includes a premium of Rs 4. On 1st January 2009 the corporation purchased
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. . . . . . . . . . . . 53 1 The Binomial No-Arbitrage Pricing Model 1.7 Solutions to Selected Exercises Exercise 1.2. Suppose in the situation of Example 1.1.1 that the option sells for 1.20 at time zero. Consider an agent who begins with wealth X0 = 0 and at time zero buys ∆0 shares of stock and Γ0 options. The numbers ∆0 and Γ0 can be either positive or negative or zero. This leaves the agent with a cash position of −4∆0 − 1.20Γ0 . If this is positive‚ it is invested in the money
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