faqs.org » Abstracts Index » Abstracts » Business, general

Pricing a class of American and European path dependent securities

Article Abstract:

Path dependent securities are difficult to price using the commonly applied backward evaluation technique because it cannot provide the values of state variables on which the securities depend. An attempt is made to price a certain class of US and Europe versions of these path dependent securities. A series of propositions, which can be implemented through backward numerical methods, are developed. Backward iteration methods are introduced which can be applied via lattice methodologies for path dependent securities with cash flows that meet specific homogeneity criteria. These backward iteration approaches are popularly employed as a control variate in index principle swaps with clean-up features.

United States, Europe, Prices and rates, Securities, Securities prices, Derivatives (Financial instruments)

---

Influence activities and strategic coordination: two distinctions of internal and external markets

Article Abstract:

A Fortune 100 corporation is examined to compare its internal and external markets in terms of strategic coordination and influence activities. Strategic coordination is more advantageous in internal markets, while influence activities are less expensive in external markets. Findings of the exploratory study reveal that profit center managers engage in influence activities by negotiating price adjustments, which result in renegotiation costs that are higher in internal markets than in external markets. However, results also show that the strategic policy of implementing cost reduction works better in internal markets. Evidence suggests that cooperation and competition coexist in internal markets.

Case studies, Markets (Economics), Strategic planning (Business), Interorganizational relations

---

Some parts © 2012 Advameg, Inc.