...the price of stock market index future contract will decrease and the price of the stocks goes up. In general, the systematic risk of the portfolio that cannot be reduced by diversification has been hedged. A hedge is an investment position intended to offset potential losses/gains that may be incurred by a companion investment. In simple language, a hedge is used to reduce any substantial losses/gains suffered by an individual or an organization. According to Bruce Greenwald, investors who primarily trade in futures may hedge their futures against synthetic futures. A synthetic in this case is a synthetic future comprising a call and a put position. Long synthetic futures means long call and short put at the same expiry price. To hedge against a long futures trade a short position in synthetics can be established, and vice versa. The diagrams above are payoff diagrams (TheOptionsGuide,2013) of long stock and short future. If David buy a future contract on the S&P 500 Index, he payoff at the maturity date, T, is the difference between the cash value of the index, ST, and the futures price, F. Payoff=ST-F. From these two diagrams it is clear that the trend of long stock is in the opposite direction with short futures, and this is how hedging works. If an equity portfolio is hedged with the appropriate futures contract sold short, any decline in the value of the equity shares will be offsets by an increase in the value of the future position. If the value of the equity...
Words: 863 - Pages: 4
...market, and for speculating on subsequent spot movements. › Hedging - Fiduciary call writing - Covered call writing - Protective put buying › Synthetic futures contracts › Speculating - Spreads - Straddles - other 2 › Fiduciary call writing - Writing call options against an asset already held - Involves frequent rebalancing to maintain a hedged position › Covered call writing - Hedger simply writes one call option for each unit of asset held › Synthetic puts - Created by one call option for each unit of an asset sold short › Protective put buying - Purchase of put options to insure a long asset position › Synthetic call - The combination of a short asset and a written put 3 Creating Synthetic Futures Contracts › Options can be combined to create synthetic futures contracts › A combination of options that consists of a written European call and a purchased european put, with the same exercise prices and expirations, behaves in a manner identical to a short position in a futures contract. › A long position in a synthetic futures contract is created by purchasing European calls and writing corresponding puts. 4 Put-call futures parity › A riskless portfolio consisting of short futures contract and long synthetic futures contract Position Current Value STX Short Futures 0 Tf0 Long Call CE 0 ST-X Short Put -PE -(X-ST) 0 Tf0 Tf0 CE -PE - ST –X Tf0 - ST –X › The...
Words: 851 - Pages: 4
...Is ‘Synthetic Biology’ Exciting or Terrifying? Synthetic biology is often referred to as being a combination of engineering, chemistry and biology. Synthetic biology is defined as being either the design and construction of new biological parts, devices and systems or the re-design of existing, natural biological systems. This means that a wide range of experimental and tested techniques are used to alter existing biological systems or create new ones. This could mean altering the DNA of a bacterium or inhibiting a material with microorganisms, the possibilities really do stretch even the wildest of imaginations. There are many different levels of synthetic biology, based on the size of the structures involved ranging from a molecular level to multiple organism system. This does not necessarily affect complexity though, all synthetic biology research is proving to be very complicated and difficult but interesting and exciting none-the-less. There are some very interesting and very exciting ideas that scientists have deemed theoretically possible and are currently researching. A lot of these ideas are potentially very beneficial, some to the environment, some to human and animal health, and some to manufacturing. Although still very much unexplored, these theories seem exciting and interesting and make synthetic seem as though it is the future of science. However, there are some ideas that become more ethically and morally controversial, not to mention may have negative...
Words: 902 - Pages: 4
...Abstract Synthetic biology is a brand new field of research, its advances and prospects making it one of the currently most interesting areas in science. Globally, synthetic biologists are constantly thinking of new ideas and novel situations which they believe to be achievable in the near future. The aim of this project is to research and discuss the endless possibilities of this subject, but to focus on how these new ideas could provide for such a rapidly expanding population, or even how they could save the world from crisis. Despite having the potential to increase food production, reduce atmospheric carbon dioxide concentration, and even cure previously incurable illnesses, scientists have suggested numerous environmental and economical impacts some projects could make. Along with other controversial topics, ethical issues are one of the most talked about things in synthetic biology. This is mostly because the field is advancing at such a fast rate, that the scientists conducting research can’t keep the general public up to date with the scientific results, which the average person may not fully understand. Mass media also plays a big role in sparking controversy, as they will exaggerate things to smear the idea of synthetic biology replacing the natural way of producing foodstuffs and fuel. Synthetic biology has many different branches to it, but all of it comes down to genetic engineering, with added engineering. It is, essentially, programming living cells to do what...
Words: 483 - Pages: 2
...Institute was created to support science education and help provide opportunities for students, teachers, and scientists to work together within the life science industry. The mission of the BIOCOM Institute is to serve as a bridge between university students and life science companies to create a wide-range of education initiatives that advance scientific learning. The Institute has been successful at partnering with key agencies, life science companies, and areas of learning to encourage change through network collaboration and outreach programs. These communities have come together to create innovative solutions for meeting local and state science education and workforce needs. The BIOCOM Institute helps to ensure a prosperous and productive future for the life science industry. Through the Economic Development for a Green Economy (EDGE) initiative I will be able to work with San Diego based companies that are in the alternative biofuel industry. The EDGE Initiative will provide me with the education, training and placement services in the growing biofuels/ biotechnology industry I need to get myself ready for graduate school. This will allow me to see the inner working of this fast growing industry and what it takes to be an industry leader in this new and emerging field. This will also help me to better understand what area of study I want to continue with. I believe that I want to pursue a career in the field of developing a renewable fuel that can be grown from simple algae. I...
Words: 1236 - Pages: 5
...Alternative Solutions 1. Stay in current industry and go into synthetic diamonds for industrial purposes. * This will not damage the brand name that they have created for themselves in the natural diamond industry as opposed to if they decided to do both synthetic and natural diamond industry. * Less risk if they decide not to enter a new industry that is growing, however not positive if maybe just a fad. * If they stay in current they have to do product development which means to stay in the same market but develop new products. * This way they can differentiate themselves from other natural diamond companies and capture more market share because there is more competition now. * Have to come up with new occasions to use the diamonds for other than just weddings because industry is currently in the mature stage so profits may be increasing at a decreasing rate. * Make synthetic diamonds only for industrial purposes and not more jewellery, that way they don’t lose any brand loyalty from existing customers. 2. Stay in current industry; however go into synthetic diamond industry with a new brand name. * that way the DeBeers reputation and name is not destroyed if they use same name brand * huge risk going into different market which is a substitute for current industry * synthetic diamond industry is in early growth stage because it is growing by 10-15% every year. * Synthetic diamonds are much more eco-friendly to produce than natural...
Words: 458 - Pages: 2
...Humanity’s Next Great Leap Media Analysis of a Scientific Case Study Abstract The human race’s ability to manipulate the world around us has continued to grow exponentially as we have made our various technological leaps further forward into the future. J. Craig Venter, and a team of his best and brightest, managed to push the envelope even further with his breakthrough discoveries in genomic research, resulting in the creation of the first ever self-replicating man-made living cell. Many pivotal discoveries such as this have played key roles in shaping humanity’s development. Things that were once considered to be out of our reach or of unknown origins have slowly been unlocked as a result of the advancements we have made through the ages. This paper analyzes how the journalists of three separate internet news articles reported on JCVI’s successful creation of a synthetic bacterial cell. The purpose was to interpret the articles and to determine whether or not the information within them accurately reported the findings of the J. Craig Venter Institute’s case study. There has been a great deal of speculation as to what the next scientific advancement will be to act as the catalyst for the next great leap forward in mankind’s long history of scientific progressions. Many of our newly discovered technologies have greatly improved the quality of our lives, while others have simply given rise to increasingly more efficient ways for killing one another. The difference between...
Words: 2540 - Pages: 11
...Case 5: Financing PPL Corp.’s Growth Strategy Study Questions 1. Evaluate PPL’s growth strategy and financing policies. Why is it important for PPL to seek out alternative financing strategies instead of using its own corporate balance sheet? In the early 1990’s, the anticipation of deregulation in the electricity marketplace led PPL to change its business strategy. It was essential for them to enter the market as soon as possible or they may have faced barriers to entry. In 1994, PPL established a new subsidiary now known as PPL Global. PPL Global pursued opportunities in the deregulated electricity market and was employed its growth strategy for the future. They specifically explored opportunities in power generation, marketing, and trading. The management had a belief that their vertical integration was a good thing as they had prior experience in the segments and this would enable them to balance out the unstable earnings from the deregulated, and the more stable earnings from the regulated transmission and distribution businesses. In 1998 PPL reduced dividends, increased their target payout ratio from 45% to 55%, and bought back 17 million shares of common stock. These actions by the company were made to try and fund growth within the company by increasing cash flows. In 2001, PPL was successful in securitizing its electric delivery business. The electricity industry, being a capital intensive industry required them to have access to low cost capital. Their need to...
Words: 1127 - Pages: 5
...A Critical Assessment of Immanuel Kant's Epistemological Alternative to Hume's Fork All the objects of human reason or enquiry may naturally be divided into two kinds, to wit, Relations of Ideas and Matters of Fact. Of the first kind are the sciences of Geometry, Algebra, and Arithmetic; and in short, every affirmation which is either intuitively or demonstratively certain. That the square of the hypotenuse is equal to the square of the two sides, is a proposition which expresses a relation between these figures. That three times five is equal to the half of thirty, expresses a relation between these numbers. Propositions of this kind are discoverable by the mere operation of thought, without dependence on what is anywhere existent in the universe. Though there never were a circle or triangle in nature, the truths demonstrated by Euclid would forever retain their certainty and evidence (Hume, Section II). Matters of fact, which are the second objects of human reason, are not ascertained in the same manner; nor is our evidence of their truth, however great, of a like nature with the foregoing. The contrary of every matter of fact is still possible; because it can never imply a contradiction, and is conceived by the mind with the same facility and distinctness, as if ever so conformable to reality. That the sun will not rise tomorrow is no less intelligible a proposition, and implies no more contradiction than the affirmation, that it will rise. We should in vain, therefore, attempt...
Words: 2394 - Pages: 10
...JANUARY 19, 2011 GLOBAL CORPORATE FINANCE SPECIAL COMMENT The Current Menu for Renminbi Bonds in Hong Kong: Dim Sum or Synthetic? Overview 1 2 5 Table of Contents: OVERVIEW MARKET PERSPECTIVE SURGE IN RENMINBI DEPOSITS AND TRADE SETTLEMENTS IN HONG KONG GROWTH IN RENMINBI TRADE SETTLEMENTS SUBJECT TO REGULATORY MEASURES SURGE IN DIM-SUM BOND ISSUANCE DIVERSIFICATION OF ISSUERS THE “DIM-SUM SUBSTITUTE”: SYNTHETIC RENMINBI BONDS 6 6 7 9 This report addresses recent developments in the offshore market for bonds denominated in mainland China’s currency, the Renminbi (RMB), whether settled in RMB or another currency. Called “dim sum” bonds when settled in RMB or “synthetic” if settled in other currencies such as U.S. dollars, these debt instruments have so far come out primarily in Hong Kong, with several synthetic convertible bonds in Singapore. However, in future, Chinese authorities may allow offshore RMB transactions elsewhere, and more euro-RMB bonds1 issued in other financial centers could soon appear. A comment answering investors’ frequently asked questions on our approach to rating both types of these bonds will follow within a few weeks. The progressive internationalization of the RMB will facilitate growth in Hong Kong of both kinds of RMB-denominated bonds. In particular, the rapidly expanding volume of the city’s deposits and of trade settlements in RMB has driven growth in dim-sum bonds, and the Chinese government’s allowance last week for Chinese...
Words: 4815 - Pages: 20
...The future has many possibilities, positive and negative. There are endless amounts of studies and research being done to help bring forth tomorrow and a legacy we’re proud to leave to our children. One of the major problems we’re facing today is Oxygen consumption. We have no way of producing Oxygen efficiently, other than photosynthesis. Well, a student of the Royal College of Art by the name of Julian Melchiorri, along with help from the Tufts University Silk Lab, has helped us take a giant leap towards a real solution. They have created a synthetic leaf that breathes just like a real one. “The leaf is made up of chloroplasts from plant cells, the part where photosynthesis happens, suspended in a web of silk protein. The protein was extracted from natural silk fibers” (International Business Times, 2014). This means that, with a small amount of energy, water, and light, we can produce fresh Oxygen anywhere without the limitations of agriculture. “My idea was to use the efficiency of nature in a man-made environment” (Hobson, 2014). The first thought that comes to mind when those words were uttered: Deep-Sea and Space Travel. If we are able to produce Oxygen synthetically, then we no longer need Oxygen tanks for submarines or spacecraft. We can traverse all of these new reigns without worry of running out of breathable air. Who knows what we’ll find there? Most likely case, we’ll discover species we’ve never known to exist, and those that were only rumors for generations....
Words: 709 - Pages: 3
...PPL Growth Strategy and Financing Policies Pennsylvania Power and Light Company (PPL) was originally incorporated in 1920 as holding company. 1920-1994 PPL operated as a vertically integrated utility. In 1994 the company’s management recognizing and anticipating changes to the electric utility industry chose to changes it strategy by creating a subsidiary PPL Global “to pursue business opportunities in the unregulated electricity marketplace” (Esty, Ferman3). Senior management recognizing the need to create a more competitive environment within the company began a restructuring process from 1994-2000. In 1999 the company announced it intended to double its generation capacity by 2005 “through acquisition of existing plants and development of new plants” (Esty, Ferman 4). Jim Abel and PPL’s Finance team determined that in order to execute this new strategy PPL needed to maintain access to large amounts of capital at low cost while maintaining the financial soundness of the corporate balance sheet. This culminated in the separation of its unregulated generation businesses from its regulated distribution and transmission businesses in 2000(Esty, Ferman 4). The environment PPL was operating in during this time was not conducive to PPL Global using Corporate Finance to raise the billions of dollars needed to fund the expansion of the company’s generation portfolio. To use Corporate Finance would result in a burden on the company as a whole while putting the PPL at risk of...
Words: 2276 - Pages: 10
...The Cubism movement can be broken down into two primary styles of Analytical and Synthetic Cubism, each equally influential in their own way. First up was Analytical Cubism; this references the artist objective of analyzing and breaking down of the form and space within the picture plane. Analytical Cubism was the period from 1907 to 1912; it was formed primarily at the hands of Pablo Picasso, Paul Cezanne and George Seurat. Analytical Cubism was a period of exploration in separating the perceived reality of what we can view and the intellectual reality of what we know. These characteristics include flattening the pictorial surface and simplifying the picture plane to only a basic geometric fragmentation of the subject. Additionally, minimal color was used in order to further flatten the subject. Flatness was a key characteristic of Analytical Cubism; lack of warm and cool hues prevented the subject from becoming dimensional and eliminated any single focal point. With the goal of Analytical Cubism being to separate realities, artist used easily recognizable items or ordinary subjects. Things used were often just found around the artist studio; typical choices of subject matter include bowls of fruit, bottles or glasses. These were chosen so that the viewer could easily understand what they were seeing and how it had been manipulated and separated from perceived reality. Next up was Synthetic Cubism, which lasted from 1912 to 1914, but was seen into the early 1930s. This...
Words: 1004 - Pages: 5
...There are 118 elements on the periodic table, but not all of them actually occur on Earth. An element is any substance that cannot be chemically broken down into simpler substances. While most of these are naturally-occurring, synthetic elements are created artificially in a laboratory. They make up about 20% of the periodic table. Synthetic elements can be created in different ways and have several uses in science as well as everyday life (Lagowski et al., 2016). The first synthetically-created element was technetium, atomic number 43. It was created by Carlo Perrier and Emilio Segre in 1937 (Thomas Jefferson National Accelerator Facility, n. d.). Since then, scientists have created promethium, atomic number 61; astatine, atomic number...
Words: 669 - Pages: 3
...For the exclusive use of J. Toerroenen 9-910-045 REV. MAY 13, 2013 JOHN S. HAMMOND C.K. Claridge, Inc. On a Sunday in mid-September 2009, Christine Schilling was in the office of Ralph Purcell, president of C. K. Claridge, Inc. (CKC). Schilling, recently hired by Purcell, was going over an analysis she had recently prepared and discussed at a meeting in New York with the firm’s intellectual property attorneys. Purcell hoped that by the end of the afternoon, aided by Schilling’s insights, he would be able to establish a course of action that might hasten the final settlement of a patent suit brought against CKC three years earlier by the Tolemite Corporation and its licensee, Barton Research and Development (BARD). The Contenders CKC was founded in Milwaukee, Wisconsin, in 1948 as a commercial outlet for the inventive genius of Dr. Charles K. Claridge, an astute organic chemist. Dr. Claridge owned and managed the company until 1996, when, desiring to retire, he sold it along with all of its patents and products to Arnoux Industries, a small Chicago-based conglomerate. CKC continued to prosper as an Arnoux subsidiary and by 2009 had projected annual sales of about $105 million, 14% of the Arnoux total. About 10% of CKC’s sales in 2009 were derived from a chemical component called Varacil, whose manufacturing process was the subject of the patent suit. The remainder of its sales included a wide range of specialty organic chemical products, sold in relatively...
Words: 6113 - Pages: 25
