1 Introduction2 OptionsAn option is a contract between a buyer and a seller that gives the right (butnot the obligation) to buy or sell the underlying asset for an agreed price ata later date. The agreed price in the contract is known as theStrike price.The date in the contract is known as theexpiration date. There are twobasic types of options; Call options and Put options. Most options are eitherEuropean or American options. But there are other options such as, Asianoptions or Look back options [1]. Options are said to have been around formany years even centuries, in various forms. For instances in Roman times,clauses in marine cargo contracts are now considered as options. to show youwhy it has such a wide spread use. lets say …show more content…
So to insure you makea pro t it is in your best interest to sell the product for a price agreed uponprior to the trip. Alternatively, if you wanted to buy a product which youknew would later increase in price, by xing the price beforehand you wouldinsure you make a pro t. Interest are how the contracts are priced.2.1 Call OptionsCall option gives the buyer, the right to buy the underlying asset by theexpiration date for the strike price. The payo , for the Call option is theamount by which the stock price exceeds the strike price. If the stock price isbelow the strike price, the payo is zero. This is shown below under EuropeanOptions [1].2.2 Put Optionsput option gives the buyer the right to sell the underlying asset by the expi-ration date for the strike price. For a Put option, the payo is the amountby which the strike price exceeds the stock price. If the strike price is belowthe stock price, the …show more content…
Presenting itselfas the most basic type of option contract, options of this type give the holderor seller of the option, the ability to exercise the option only at the expirationdate. The payo is given by;max(0;STK)for a European call option,max(0;KST)for a European put option, whereSTis the price of the underlying asset atthe expiration dateTandKis the strike price [2].2.4 Asian OptionsAsian options are path dependent options and are also called average-priceoptions. The main characteristic of an Asian options that the payo is de-pendent of the average price of the underlying asset, over a speci ed timeand frequency, during the lifetime of the option. The reason why it is calledan Asian option is because the creators, Standish and Spaughton were onbusiness in Tokyo when they developed it. Asian Options through out timehave become popular for many di erent reasons. One advantage of Asianoptions is that it reduces the risk of market manipulation of the underlyingasset at expiration. Many rms in foreign currency are a ected by periodicalpayments and need to hedge their
The negotiations were successful! An agreement was reached and I got the job! This success was due in large part to the extensive planning prior to the negotiation with Robust Routers. Planning is critical to a successful outcome when negotiating (Lewicki, Saunders & Barry, 2011). This was especially true in negotiating this job offer as the bargaining mix included items as varied as state of residence, salary and even stock options. Also of great benefit was that both sides realized that the while the outcome was important the relationship would be protected and even strengthened as a result of our collaborative negotiation (Lewicki, Saunders & Barry, 2011).
Ramona faces a difficult decision after her trip to the headquarters of Next Step Herbal Health. Next Step offered her a lucrative starting salary plus commissions, and a junior manager position. Ramona should not take the position with Next Step due to its questionable business practices, the dismissiveness of the Next Step recruiter when questioned regarding the company’s ethics code and the CEO exhibiting non-ethical and immoral behavior.
Legal Studies Essay Joey Agerholm Exclusion clauses determine the liability of something that might go wrong within a contract. They are used by sellers as an attempt to avoid or limit their liability. The seller has the advantage over the buyer who must agree to the clauses to purchase the product/service. Because of the buyers disadvantage the court takes such cases, involving exclusion clauses, very seriously, and the content of the clauses are carefully interpreted. With the current Trade Practises Act and the Fair Trading Act the standard form of business contract is adequate and effective in protecting the buyer. The Trade Practise Act is the most effective legislation for the protection of the consumer. It implies to the following situations:- - “A promise by the seller that the buyer will become the owner” If a car dealer breaks a promise or part of a contract, for example that he has the right to sell a car, and the car is stolen then although the buyer will have to give the car back he/she will get her money back. - “ A promise by the seller that goods will fit the description supplied by the seller” In this case the buyer is protected if the seller makes a promise, which is a condition of the contract, describing the product, and when the buyer receives the product, it does not match the description. - “ A promise where the seller is made aware of the purpose for which the goods are required, that the goods will be reasonably fit for that purpose” This condition is implied when the buyer makes the purpose of the goods needed known to the seller, and the buyer then relies on the seller’s judgement in providing the correct product. For example it would not be reasonable if you made the seller aware that you wished to purchase something suitable for mowing the average suburban backyard and you were sold a tractor. - “A Promise that goods are of merchantable quality” According to this act a good is considered to be merchantable if they are suitable for the prospect for which other similar goods are sold, involving the description applied to them, the price and any other relevant information. This act does however does not protect the consumer if he/she has examined the product and missed any defects that should have been seen or if the seller made him/her aware of the defect prior to the purchase of the product.
can just give up the option premium and discard the options. However, if the company strongly
In this case study, Laura and Danny have had significant changes in their lives. Laura has now left with the children and planning on moving with them to El Paso, Texas in a month. She has also filed for divorce from Danny. While Laura is making positive improvements to her life she is still concerned for Danny. She goes to collect what’s left of her belongings when she finds Danny in a state of panic. Danny has let himself go at this point. He started consuming alcohol, has not found a job, and is living with no electricity. Kid decides to pay Danny and Laura a visit and he quickly realizes Danny is in trouble. Danny begs for Kid’s assistance in order to help him start a new life. Danny is worried that he will end up alone and homeless
According to Munsterberg’s film theory, the motion picture is an original medium in that it aesthetically stimulates the spectator’s senses. Although both still picture and theatrical play can possibly leave images on the spectator’s retina or brain, each element of motion picture, including camera angle and work, lighting, editing, music, and the story itself, appeals to somewhere more than just retina or brain— the element of motion picture truly operates upon the spectator’s mind. Speaking of Darren Aronofsky’s Black Swan, the film unfolds a story of physically and mentally repressed ballerina’s life. Due to the film’s effective filming and editing techniques, the film successfully increases excitement as well as suspense in the story. Since Black Swan captures not only the real world the ballerina lives in but also the other side of the world the ballerina has within her mind, its spectator would experience a fantastic world where one ballerina lives in two different worlds at the same time. Even though the still picture and the theatrical play also give the spectator either a visual or an aural image, motion picture is the one that stimulates the spectator’s senses with its story, color, sound, acting, filming, and editing.
Contractual agreement has always been viewed in terms of offer and acceptance. The universal principle to contract law has always been parties may get into an agreement in whichever way they deem fit and they are subject to certain terms as they choose. As far as legal requirements vital to their formation are binding contracts may be formed. Moreover a binding agreement may be manifested in terms of writing or in verbal form.
The exclusion clause is an important device for allocating the risks between the contractual parties. However, the exclusion clauses could mostly be found in written contracts, especially standard form of contracts. Standard form contracts with consumers are often contained in some printed ticket, or delivery note, or receipt, or similar document. In practice, it is very common that if a person wants the product, he may have no alternative but to accept the terms drawn up by the other party even though such terms are disadvantage to him, or he may simply accept it regardless the possible unfavorable position because he does not trouble to read a long list of terms and conditions. Therefore, contracts are regularly signed, tickets are simply accepted, or a tick-box on a website is clicked, commonly between large companies and individual consumers.
“Options give you the right (without the obligation) to transact a security at a predetermined price within a certain time period. In a call option, the buyer has the right (but is not required) to buy an agreed quantity of a commodity or financial instrument (called the underlying asset) from a seller by a certain date (the expiry) for a certain price (the strike price). A put option is the right to sell the underlying stock at a predetermined strike price by a certain date” (Call Option vs Put Option, 2014).
The English contract Offer and Acceptance General principles There are three basic essentials to the creation of a contract which will be recognised and enforced by the courts. These are: contractual intention, agreement and consideration. The Definition of an Offer. This is an expression of willingness to contract made with the intention (actual or apparent) that it shall become binding on the offeror as soon as the person to whom it is addressed accepts it. An offer can be made to one person or a group of persons, or to the world at large.
One of the last remaining strongholds of classical contract law is the notion that contracts require offer and acceptance therefore, in order for a contract to become binding, offer, acceptance, consideration and intention to create legal relations must exist. However contracts are formed in different ways for each different circumstance. (Shawn Bayern, Offer and Acceptance in Modern Contract Law: A Needles Concept, 103 Cal. L. Rev. 67, 102 (2015)
Perhaps one of the most fundamental principles of Microeconomics is that people face tradeoffs. According to Mankiw, “making decisions requires trading of one goal against another.” This situation of facing tradeoffs stems from the concept of scarcity - which in essence is limited resources - forcing one to make decisions and tradeoffs between several options. A concept well associated with this is opportunity cost - which is defined as how much one has to give up (the cost) in order to get the good or service (generally the alternative desired or wanted). Opportunity cost is also commonly defined as “the value of the next best alternative in a decision.” This concept of opportunity cost may be difficult to grasp as a bare definition but applying it to a situation may simplify and clarify the concept allowing a more universal understanding of it. To better our understanding of this concept, let us analyze the following scenario and assess the opportunity cost associated with it.
This judgment given set criterion which is still been used in the modern court system and due to this case it was developed that an offer of contract can be unilateral and doesn’t have to be made to a specific party only. Also it was developed to that the acceptance of an offer does not require a notification and that once the concerned party purchases the product the contract is active then and there itself. And it was also established that purchase of an item is a fine example of consideration and therefore makes it a valid contract. (Smith, 2000).
An offer is the willingness to contract with a specific set or terms made by the offeror that if accepted that person or individual is bound by a contract.
The company listed on the JSE (Ltd) that I have decided to focus on is Pick n Pay. I have chosen this company as, since the first store was established in 1967, 941 stores have been opened countrywide in South Africa (FastMoving, 2012), which leads me to believe that this specific franchise has a very good sense of business sustainability.