session 3. Futures

Futures and forwards (II)
The no-arbitrage principle. Consider a forward contract that obliges us to hand over an amount K at time T to receive the underlying asset. Today’s date is t and the price of the asset is currently S(t), this is the spot price, the amount for which we could get immediate delivery of the asset.
When we get to maturity, we will hand over the amount K and receive the asset, whose worth is S(T), and we cannot know this until time T.
Enter into the forward contract. This costs
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Policy Context

Key concepts

-states as actors and arenas

-state projects and social projects

-meta – institutions

-state – society relations

-unitary vs federal state

-actors: executives, legislators, bureaucracies, political parties, publicity, pressure groups, think tanks, mass media

Unitary state – policies implement faster but they still need to tale politics into consideration

Executive – has the power it implements policies, not the legislators. Minister is executive (e.g.). They set political

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2He seems to be very lonely and selfish, he thinks that one has make his own way, without caring about that, first goes you and your life and your family. Selfish ( only thinking about family)- reputation of his family. Wife= she was from the landed gentry (increase his own social standing Sheila= his interest in her marriage stems from his desire to expand his business rather in his daughter’s happiness .Eric= Money and making him pay it back( semi-exploitation now worried about Eric´s moral implication

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Finance for development

  • Financial system and economic devp: fin system: demand for fin services comes from activities of nonfin firms(real sector), Monetary policy in dev: regulate economic activity and inflation,
  • ↑ supply $ -> ↑ loanable funds -> more investments + ↓ i/r
  • Why dev different? They have highly organized, economically interdependent and efficient functioning(spatially fragmented) money and credit markets. Consistency&uniformity in i/r across different sectors®ions
  • Constrained by the openess
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§Financing rate

·Compare both financing rates and the purchase price offered by dealers

oNegotiating the price

§Some dealers negotiate and some do not

§Sticker price is manufacturer’s suggested retail price (MSRP)

§Negotiating by phone or fax – may be beneficial

§Call several dealers

§Trade-in tactics

·Attempt to negotiate price of new car before mentioning that you have a trade-in

§Value of information

·Info is valuable so shop around

§Purchasing a car online

·Not as efficient as

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Econ Cheat Sheet

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of: buyers and sellers.–In countries like _____________ the command economy predominates.Cuba and North Korea–Which of the following best denotes the reason for the existence of substantial black markets?a command economy–If macroeconomics looks at the economy as a whole, it focuses on which of the following?unemployed people–In the circuar flow model diagram,Businesses buy resources from

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