Arbitrage

Part e1. In 1973, Fisher Black and Myron Scholes developed the Black-Scholdes option pricing model (OPM). What assumptions underlie the OPM? Answer. There are several assumptions underlying the OPM. First, the stock underlying the call option provides no dividends or other distributions during the life of the option. Second, there are no transaction costs for buying or selling either the stock or the option. Third, the short-term, risk-free interest rate is known and is constant during the life…

to be deducted, the interest expenses should be indexed. Interest expense would also be indexed, so only the excess of interest above inflation would be deductible. This will be benefiting since they could result to the taxpayer gaining a pure arbitrage dividends by subtracting the nominal interest at the same time recognizing real gains. Variations on a consumption tax such as the flat tax or David Bradford’s X-tax could protect low-income taxpayers from the burden of a consumption tax, but…

. Syntel Another Pure Play BPO company from India Syntel started in 1994 by acquiring Metier a US based company providing data management, data warehousing datamining, e-commerce and enterprise resource management solutions. The interesting part is Syntel is compounded annual growth rate is always more than the Industry levels since it is focused on high end value based service offerings. From the US acquisition its major market is remains from US only. In 2013 it launched…

Shadow banking institutions act as a middle man between an investor and borrowers who provide credit and capital for the investors and corporation for the investment which in turn get the profit from the fees and /or from the arbitrage interest rates. As the shadow banking system is non- traditional banking system, they don’t pick up deposits like commercial banks. They have less regulatory limits and laws and that’s why they are not subject to regulatory control of unregulated…

Introduction The nineties were a strange, almost fantastical time; new technology was being created, Presidents were playing the sax on television, and Bernard, informally known as Bernie, Madoff was serving as the NASDAQ chairman. Bernie climbed the economic ladder, eventually being in control of millions of investments in 2008 until it was found out that he had been the head of the largest Ponzi scheme in America. Madoff’s case is not only important to the how expansive it was, but how…

information technology and analytical capabilities to deliver superior service. Company’s Evolution over the years 1. Labour Arbitrage: Company’s evolution dates to GE. It started as a business unit of GE to provide cost effective BPM services to GE’s businesses. 2. Productivity and Capacity Expansion: Once the company identified its USP- Labour arbitrage, it focussed on expanding its presence across low cost locations. Hence, 1998 1 onwards, the company started its operations across…

According to Lo (2007), the efficient markets hypothesis (EMH) maintains that market prices fully reflect all available information. It was developed independently by Paul A. Samuelson and Eugene F. Fama in the 1960s, this idea has been applied extensively to theoretical models and empirical studies of financial securities prices, generating considerable controversy as well as fundamental insights into the price-discovery process. Ang (2011) stated that the early theoretical articulations of…

Charles Ponzi Charles Ponzi was to leave his name on any scheme whose success was fostered by quick returns to early investors that were paid by money invested by others later. Ponzi arrived in Boston on November 15, 1903 aboard the SS Vancouver with two dollars and fifty cents in his pocket, having lost his life savings gambling during the voyage. The 5 foot 2 inch alien learned English quickly and spent a few years doing odd jobs, including working as a dishwasher in a restaurant, where he…

Nearshoring: Scope of Services and Key Success Factors Do you want to make your company more responsive and better at completing projects? Setting up a nearshore team might be your solution! Here are our key success factors for companies. 1. Nearshoring Nearshoring (nearshore outsourcing) is when you get your services or work performed by people in countries adjacent or next to yours. This can be setup internally with your own firm’s talent or alternatively with an external partner (service…

“Murder at the Margin” starts off with a professor from Harvard University Henry Spearman, who taught economics, him and his wife both, were going on vacation to Cinnamon Bay. While on a ferry that was taking them to the island, they meet an old coworker, Professor Mathew Dyke who teaches theology at Harvard. While the Spearman’s were on the islands they meet different type of people. They met a Supreme Court retiree Justice Foote and his wife. Then Mr. and Mrs. Doakes but Mr. Doakes had a…