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Derivatives Management 2
Derivatives Management 2
Derivatives Management 2
Derivatives are mostly used to hedge (limit) risk But like most financial instruments, they can also be used for speculation taking on added risk in the expectation of gain
Stodder: Derivatives
Stodder: Derivatives
Stodder: Derivatives
PV = $22.50/1.08 = $20.83
Stodder: Derivatives
of a share. Then
PV Portfolio = Cost Stock Value of Option
$20.83 = $30 Value of Option => V.o.O. = $9.17, what you sell it for
Stodder: Derivatives
Stodder: Derivatives
Stodder: Derivatives
Run Simulation
From Financial Models Using Simulation and Optimization by Wayne Winston.
Stodder: Derivatives
St
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Stodder: Derivatives
Stodder: Derivatives
Stodder: Derivatives
If you had a car that is less damaged by any given car crash would that make you drive faster? If you (and everybody else) drove faster, could this actually wind up making you less safe ?
Stodder: Derivatives