Option Pricing Models
Research Proposal Title: Option Pricing Models Introduction It is known that most of the option pricing models and techniques employeed by today's analysts are rooted in a model developed by Fischer Black and Myron Scholes in 1973. One basic assumption of BS model is that the stock price is log-normally distributed with constant volatility. However, Fama (1965) and Mandelbrot (1966) found that stock returns exhibit both fat-tailed marginal distributions and volatility clustering. These features are interpreted as evidence of stochastic volatility of financial asset prices. To overcome the shortcoming, many researchers have contributed to substantial new models that incorporate stochastic volatility in the last two decades. It is thus interesting to examine whether the stochastic-volatility option pricing models provide improvements to the BS model. During the past decade, researchers have begun to study generalized autoregressive conditional heteroskedasticitic (GARCH) models for option pricing due to the superior ability of this class of models to describe asset return dynamics. Duan (1995) developed a theory with respect to which options can be priced when the evolution of the asset return follows the GARCH process. Empirically, Duan (1996), Heston and Nandi (2000), Hsieh and Ritchken (2000), Hardle and Hafner (2000), Duan and Zhang (2001) and Christoffersen and Jacobs
Organisational behaviour.
Alison Jones/ Organisational Behaviour Outcome 3.2 Needs Theory: The needs theory is made up of: Basic Needs - The workplace needs to be suitable for the work force, complying with health and safety regulations etc. Security Needs - Security in the work place, if there is money being handled then there needs to be the right kind of security for example safety deposit boxes and a panic button. Another type is security from their jobs not worrying from one day to the next that their job is in jeopardy. Group Needs - To expect people to be able to work in a group. If a group task needs to be completed it is not left up to one person to complete this. Self Esteem - When people's confidence is being knocked then their self-esteem is lowered people start to doubt their ability. For example if somebody is producing good work but a manager has got a grudge against them, so they keep putting their work down, then they will have doubts in their ability to achieve things because their self esteem has be knocked. Self-Fulfilment - If somebody is not getting job satisfaction then they are not fulfilling something in their life. So employees have to make sue that their work force is happy within their job. Goal Theory When people have goals to meet then they have the motivation to full fill this goal. Within a workforce if people don't have a goals or targets to meet then they
Organisational change.
The author Gareth Morgan, uses a metaphor when describing organisational change. The title of his book "Riding the waves of change" suggests that change is a very dynamic process and for like surfers, managers and their organisation have to ride on a sea of change that can twist and turn with all the power of the ocean. The ocean representing the organisations internal and external environment. John Harvey-Jones (1993, p21) once said organisations need to 'adapt or perish'. This is still as relevant now as it was in the 1990s. Change is due to a number of internal and external triggers. External triggers include, political, economic, social, technological and environmental factors and an increase in competition. Internal triggers are changes within the organisation. Change is now a major issue in which organisations, managers and their employees have to face. Organisations who fail to adapt to this dynamic environment in a suitable and appropriate manner, could face organisational failure, causing problems for individual jobs and careers. Managers need a pro-active mindset where they need to anticipate and confront challenges of the future, rather than manage in relation to events that have already occurred. When facing organisational change, managers must consider the people whom the change is affecting. These would include the people within the organisational environment,
Operations Management.
Diploma in Management Studies Module: Operations Management Assignment: This report reviews and evaluates the operations management of carrying out programmed food hygiene / health and safety inspections of commercial premises within Cherwell District Council. The report also aims to: - . Analyse the type of operations and operating processes in place for commercial premises inspection. 2. Identify and evaluate some of the major strengths and weaknesses of the Operations Functions. 3. Review the extent to which the Operation Functions supports the broader Business Strategy of the Department. 4. Make recommendations to address some of the shortfalls identified. Student: Shamsul Islam (Word count: 2,410) Contents .0 Introduction 2.0 Corporate Strategy 3.0 Operations Manager's Task 4.0 The Operations Process 5.0 Performance Objectives 6.0 Quality Management 7.0 The Cost of Quality 8.0 Resource Management and Planning 9.0 Conclusion 0.0 Recommendations .0 Introduction Cherwell District Council's Environmental Services Department (ESD) delivers a wide range of diverse services ranging from offering advice to closing and prosecuting businesses for failing to comply with environmental health legislation. There are around 3745 commercial premises within Cherwell District Council of which 1218 will require an inspection between 1st April 2003 and 31st March
Elegant Report
HOW TO REDEFINE MARKETING BY CREATING EXCEPTIONAL VALUE FOR BOTH SHAREHOLDERS AND CUSTOMERS EXECUTIVE SUMMARY This report redefines marketing in terms of share holders and customers as: "Marketing is a management process that seeks to maximize return to shareholders by developing and implementing strategies to build customer relationships of trust with high value customers and creating a competitive advantage." The report also tells us how value can be created for customers and shareholders by using value based marketing principle and taking Cadbury Schweppes as an example which became successful by creating value proposition for both customers and shareholders. Cadbury Schweppes followed the four principles by setting the right ambition, distinctive advantage, selective resource allocation, finding win-win for customer and shareholder. Creating shareholder value is then essentially about building a sustainable competitive advantage-a reason why customer prefer to buy from one company rather then the other. The only route to more shareholder value is to create more value for customers. The value to customer is created by using value proposition which are Customer Benefit- Customer must see value to them in their own terms, Unique- Customer must recognize their benefit. Profitable- The Company has to deliver at a profit; Sustainable- The advantage should be difficult to
Industry Analysis.
Industry Analysis In the United States alone, the consumer/households industry contains hundreds of competitors and numerous more worldwide because the brand name consumer goods industry is one of the most expansive industries in the world. An economy of scale defines this industry because it is rather difficult to frequently come up with ideas for new products. The basis for competition in this industry is competing with price, quality of products, constant innovation, and firms selling effort. Main types of competitors are companies that range in numerous industries and function as companies made up of several different divisions. The competition in this industry is monopolistic with firms that are of almost equivalent size and power with similar influence over the market. Also, this is a mature industry with little differentiation between products and has a low switching cost to consumers. The companies consolidate their powers into certain areas of the industry such as: laundry and cleaning, paper goods, beauty care, food and beverages, health care, and pet food. The top power holders and rivals in this industry include Proctor & Gamble, Kimberly-Clark, Unilever, Henkel, and Johnson & Johnson.2 The household goods industry has to follow strict government regulations on the testing of products on animals, comply with FDA regulations on many products, as well
Setting up a business.
Introduction In this coursework I have been set a task to set up my own business using the information I have received in my school lessons. I will borrow a £20,000 loan from the bank to start up my business. I have chosen to open a traditional restaurant serving mainly Indian dishes. It will be called Kashmiri Spices. The reason why I have decided to open a restaurant is because it is easy to run and does not require difficult work. I will run the business on my own, being a sole trader so I have total control and earn all the profit which is made. Being a sole trader, I am aware that I will have unlimited liability which can be a scare but I have researched thoroughly and am confident that the business will run well. Type of business Sole traders Sole trader describes any business that is owned and controlled by one person, although they may employ workers. This could be a restaurant, for example. Individuals, who provide a professional service like hairdressers, plumbers or photographers, are also sole traders. Sole traders do not have a separate legal existence. As a result, the owners are personally liable for the firm's debts, and may have to pay them out of their own pocket. This is called unlimited liability. A Sole trader has no one to share the responsibility of running the business with. A good hairdresser, for example, may not be very good at handling
Scientific Management.
Scientific Management Representatives of capital supporter scientific management. It proposes to increase industrial output by managing labour scientifically. But organized labour does not want to be scientifically managed. It is not keen about being managed at all. It exists, in fact, to manage itself. Labour controversies, as carried on by the American Federation of Labour, are demands for a "voice" in the settlement of conditions of work. But this demand is not recognized by capital as a principle. It is only recognized as a necessity when labour, through superior strength, secures its demands in this trade and that. The concession to labour of a voice in determining conditions of work means by implication to capital that management as a whole is still in its own hands; it also means that its actual title to superior, or ownership rights, is not in question. The Industrial Workers of the World leaves no doubt in the mind of capital that it claims only a voice in the management of industry. It makes its fight on the grounds of labour's sole ownership, as well as right, to sole management in all that labour produces. Every strike, every difference between organized labour and capital, is an attempt of the former to wrest management, or some degree of management, from the latter. Whether it is an A. F. of L. or an I. W. W. fights, there is in each and every one this issue
Role of human resources.
Task 2 - Role of human resources People, or human resources are the most important resource in any organisation and, not surprisingly there is a direct link between the quality of the workforce and commercial success. To succeed, an organisation needs staff who are committed to meeting its aims and objectives, equipped to do so by adequate training motivated by management to achieve their potential. It is the job of human resource management to recruit, develop and maintain quality staff. Within a small business of maybe 2 or 3 employees the responsibilities ill lie with the owner of the business. While smallish companies have one person who's job it is to look after issues relating to staff. Large organisations with many employees on the other hand will have a whole section devoted to personnel. The main purpose of the human resource department is to recruit, select, train and develop staff. This means finding the people, training and developing them to they can achieve their full potential and creating systems that achieve high levels of morale and motivation. The purpose of personnel administration is to provide and develop systems to carry out these functions and to maintain accurate personnel records as required by law. Many records are now stored on computer and HR departments have to be very aware of what they can and cannot do with the information under
Personal finance
PERSONAL FINANCE It is important to plan the finance for any regular expenditure such as the basic needs of any person like food, clothes, accommodation, bills etc. To be able to for fill all your personal needs you must have some kind of personal income, which will cover these expenses. The sources of personal income might be: Salary or wages A regular earned income from employment, for these earnings the employee and the employer both have to pay a deduction to the government such as income tax and N.I. contribution. Overtime An extra earned income for the additional hours of work Commissions An employee can get a percentage of the selling price of product from his/her employer. Bonus Bonus is an earning for good performance at work place. Interest Interest using your money to create more money, expressed as a rate per period of time, usually one year, in which case it is called an annual rate of interest. Winnings You may win money from playing the lottery or gambling on sport events. Gifts Money received from a friend or relative on a special occasion such as birthday. Sale of personal items Earned income from selling personal items Gross and net pay Gross pay is the total amount of money earned by an employee before any deduction is made. Net pay is the amount of money an employee receives after deduction have been made for income tax, national
