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ABF305 Investment Management
ABF305投资管理
Workshop 4 Questions
研讨会4问题
For the most part, the last group assignment for this term was numerically well done by groups. The exception was question 2 part c which students had a difficulty with. A recurring issue which was highlighted by the fourth group assignment was the misunderstanding and/or misinterpretation of financial terms. Questionable vocabulary and incorrect assumptions were also highlighted. Since the understanding of financial terms is just as crucial as the mathematical side of things, in this last workshop for the term, we will be looking at actual examples of term ‘misunderstandings’, false assumptions, and also ‘questionable vocabulary’.
大多数情况下，本学期的最后一组作业数值做得好。唯一的例外是问题2 C部分学生有困难。一个反复出现的问题，强调了第四组分配的误解和/或误解的财务条款。还强调了可疑的词汇和不正确的假设。由于财务条款的理解是至关重要的，因为数学方面的东西，在这最后的车间，任期一样，我们将着眼于长期误解，错误的假设，“可疑的词汇”的实际例子。
Below is a list of things stated by groups for the last assignment. What I would like you to do in your groups is to think about why the terms are wrong and then discuss what the student group’s might have been trying to say. You should then discuss the meaning of some basic finance terms. Felix and I will ask you for what your interpretations are to try to address misunderstandings.
下面是一个列表组所列的最后作业的事情。我想你做你的组去想为什么是错误的，然后再讨论什么样的学生群体可能一直在试图说。然后，您应该讨论一些基本的财务条款的意义。菲利克斯和我会问你，为你诠释尝试解决误解。
In the last part of the workshop, it will be an open forum for you to ask questions regarding what has been cove red in the course.
Examples of incorrect terms:
‘Sell (buy) the spot commodity…’
‘The Action futures price…’
‘Futures call option…’
‘Futures bull option (in order to take advantage……establish futures full option)’
Examples of incorrect assumptions:
Assumption: when quoted an interest rate for question 1, you could buy T-bills. Why can’t you trade with T-Bills? What makes them unique?
When interest rates are quoted, such as the T-Bill it represents a hypothetical interest rate opportunity.
Contract size versus number of shares. If 1 contract is for delivery of 1,000 shares it does not mean there are 1,000 contracts. Because 1 share is too small, futures contracts have a minimum contract size.
Assumption: ‘Arbitrage opportunity usually means the future price of current assets is lower than the future value of spot price’.
Assumptions, ‘investor gets a credit from the bank’.
Examples of ‘questionable’ vocabulary:
Long position gives $125 to the short position in a year’s time. Short position receives $125 from the long position.
The arbitrage profit for the long position is $4.60, as he can sell his new commodity at the higher market valuation.
In my opinion, cut down the commodity by establish futures call option.
The arbitrage opportunity is acceptable when….
If I kept the futures of the commodity…
General finance terms to be discussed:
Single-stock futures contract versus Index contract.
Spot price versus futures price.
Call option versus futures.
Cost-of-carry relationship (reverse cost-of- carry relationship) .
Convergence property.
Currency future, index future (3 groups referred to currency futures for the assignment, why).
Open forum for questions!
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