Topics Discussed in Class - My Participation in Class Assignment - 1

Topics Discussed in Class - My Participation in Class - Assignment Example As consumer earnings converge across nations, the manifestation of value differences will turn into a much stronger factor than expected. This happening makes it increasingly significant to comprehend values of nationwide cultures along with their impact on consumer behaviours and action. Retailing plans for one nation cannot be extended to other nations without adaptation. During my own research, I focused more on the convergence and divergence in consumer behaviour. Basically, a firm has to come up with sells techniques that meet with the limitations of their consumers in a particular market. For instance, when setting the price of a commodity, it is vital for a firm to ensure that the commodity is priced according to the consumer it targets. This means that factors such as consumer income or needs will dictate how much an asset could be priced by an organisation. Presenter 1: Main Arguments Marketers should endeavour to abide by each and every country’s regulations and laws . They should also make efforts to keep up with the regulations and laws, which change frequently and, finally, clarify ambiguous regulations, which concern their activities (Stock & Lambert, 2008, 35). Presenter 1 basically focused on the socio-economic, political, legal and regulatory environments that concern a business. According to presenter 1, the socio-economic, political, legal and regulatory factors that concern a business basically comprise of the political environment, a nation’s sovereignty, democracy, totalitarianism among others. The political environment, as expected, is made up of governmental institutions along with the manning political parties (Mooij, 2004, 98). The presenter advises that a firm has to buy into a nation’s political beliefs in order to be able to venture into that country. The presenter also goes further to argue that a country regime is the one that decides whether a firm will invest in their nation or not, and; therefore, the import ance of a firm to be accepted by the regime. Presenter 2: Main Arguments Before a firm start to sell its products, they should come up with a well planned technique of delivering their services or goods to their target market, as well as a proper way of distributing them there (Lymbersky, 2008, 23). Since presenter 2 was dealing with international market entry strategy, he referred to this as establishing, as well as managing/maintaining contracts with foreign nations. Basically, the presenter thinks that a majority of companies successfully conduct their activities in a niche market devoid of ever expanding into fresh markets. However, businesses attain success or increased sales, business stability and brand awareness through entering a new market. Therefore, a key technique should be devised for helping firms incorporate themselves into new markets. Forming a market entry strategy concerns a methodical analysis of possible customers, as well as potential competitors (Stock & Lamb ert, 2008, 36). A number of the relevant factors, according to the presenter, which are significant in deciding the possibility of entry into a specific market comprise of localised knowledge, trade barriers, competition and price localisation along with export subsidies. The presenter advises that if a firm is aware of these factors, then they stand a chance of venturing into a new market effectively. My Contribution to Topic 1 Even though, the physical environment is not regarded as one

Option Pricing Essay Example | Topics and Well Written Essays - 3250 words

Option Pricing - Essay Example Options are used by holders for leverage or for protection. The leverage function helps the holder to control the shares bought for a portion what they would have cost. On the other hand, protection measures are adopted when the holder wants to guard against price fluctuations. He enters into a contract with the rights to acquire the stock for a fixed period and specific price. The contracts, in either case, should be highly observed and monitored for efficient outcomes. The methods used in pricing options have been applied for years and can only be effective if the worth of the option is achieved. This is determined by the probability that on the expiration, the option price will be on a substantial amount of money. Any holder of an option expects a gain on his underlying asset to attain the worth of holding for the time given. The Black Scholes and the Binomial method are the elaborated on below in determining the true worth of an option. The Black Scholes Model: This model dates b ack in the twentieth century in its application. It was developed by Fisher Black and Myles Scholes in 1973 hence the name Black Scholes (Marion, 2003, 16). It is still in use today. This model uses the theoretical call price whereby the dividends amounting during the life of the option is not included in the computation.   Theoretically, the price of an option (OP) has been determined by the formulae given below: In this case: (Simon & Benjamin, 2000, 255; Brajendra, 2011, 372) The variables in the above formulae are expressed as shown below: S is the stock price X is the strike price t is the time remaining until the expiration, denoted as percent of a year r is the compounded risk-free interest rate predominant in the current market v is the annual volatility of stock price.   ln is the natural logarithm N(x) is the standard normal cumulative distribution function e is the exponential function Below are the necessary requirements for validating this model: Dividends are not p aid during the stock period. Variance and interest rate does not change in the course of the option contract. There is no discontinuity in the stock price i.e. a shift from one price to another like the case of tenders. This model applies volatility and normal distribution to determine the movement of options. The Excel add-in format can be used to calculate the normal distribution. Volatility, on the other hand, can be implied or historical. The implied volatility of an option allows market traders to observe the current prices of options to determine how volatile they are. This is done by calculating the standard deviation i.e. v2, and in this case, all other variables have to be known. Nevertheless, historical analysis is not left out. The traders have to observe the performance of the option over past years to assess volatility.