Bond and Option Pricing, Portfolio Management, and Investment Analysis
Chapter 14: Bond Pricing
Callable bonds should offer higher promised yields to maturity to compensate investors for the fact that they will not realize full capital gains should the interest rate fall and the bonds be called away from them at the stipulated call price. Bonds often are issued with a period of call protection. In addition, discount bonds selling significantly below their call price offer implicit call protection. Put bonds give the bondholder rather than the issuer the option to terminate
Read MoreMarketing Principles and Strategies: A Comprehensive Guide
Marketing Principles and Strategies
Universal Functions of Marketing
- Buying: Looking for and evaluating goods and services.
- Selling: Promoting the product.
- Transporting: Movements of goods from one place to another.
- Storing: Holding goods until customers need them.
- Standardization and Grading: Sorting products according to size and quality.
- Financing: Providing necessary cash and credit for marketing activities.
- Risk Taking: Bearing uncertainties in the marketing process.
- Market Information: Collection,
International Market Entry Strategies
Market Entry Modes
Licensing
Granting permission for others to use intellectual property (e.g., trademarks, patents) in exchange for other forms of compensation. Select trustworthy licensees, clarity in licensing agreements. Advantages: low risk, low initial investment, and quick market entry & expansion. Disadvantages: loss of control over quality or brand image and dependence on licensees.
Exporting/Direct Sales Offices
Selling products directly to customers in foreign markets. Market research
Read MoreBehavioral Finance and Market Efficiency
Stock Market Anomalies
Excess Predictability
- Excess stock returns are predictable by dividend yield.
- Size, B/M, and many other factors explain excess returns.
- Post-Earnings Announcement Drift.
- Short-Term Momentum: a stock’s past return (1 to 12 months) positively predicts future returns.
- Long-Term Reversal: a stock’s 3-year past return negatively predicts future returns.
Idiosyncratic Volatility
- Stocks with higher betas have lower alphas (holds in many asset classes).
- Stocks with higher idiosyncratic
Negotiation and Decision-Making Processes
1) Phases of the Negotiation Process
- Preparatory
- Antagonistic
- Cooperative
- Presentation of Alternatives
- Closure
2) Types of Strategies
| Strategy | Interest in Other’s Results | Interest in Own Results |
|---|---|---|
| Resolutive | High | High |
| Rivalry | Low | High |
| Complacent | High | Low |
| Inaction | Low | Low |
3) Negotiating Tactics
- Cooperative: Moderately firm. Minimum concessions. Tension-reduction.
- Competitive: Threats. Irrevocable stances. Aggressive positions.
4) Points to Achieve Efficient Trading
Achieve Substantial Results
Consists of minimizing costs and
Read MoreUtopia’s Business Strategies: A Case Study in Ethical Leadership and Sustainable Tourism
Outline Importance of Market Research to Utopia in Achieving its Sales Targets
Market research is crucial for Utopia in achieving its sales targets, especially when considering the expansion of JAC coffee to new markets like Fiji, Samoa, and New Zealand. Market research is important for various aspects such as:
- Knowing about consumer needs
- Evaluating external factors
- Maintaining the brand’s reputation when entering a new market
For a business like JAC, market research is crucial for understanding consumer
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