2. Warrant & Option
2.1. General concept
2.1.1. Warrant In this report, we would refer to the details of the warrant in chapter 3, because the warrant normally means the E.L.W. in Korea. Moreover, in fact, E.L.W. has a characteristic of option, So we mentioned the warrant simply.
(1) What is the Warrant Contracts?
Warrant is a right that someone can buy a stock at a certain price
1. Given Virgin Mobile's target market (14 to 24-tear-olds), how should it structure its pricing? The case lays out three pricing options. Which option would you choose and why? In designing your pricing plan, be as specific as possible with respect to the various elements under considerations. (e.g., contracts, the size of the subsidies, hidden fees, average per-minute charges. etc.)
[Option1
fluctuations will change the value of a contract
before it is settled. Transaction exposure is also called transaction risk.
Briefly, Transaction exposure is negative influence upon Dell Mercosur`s cash flow.
In order to hedge transaction exposure, Dell Mercosur is using forward contracts. Before finding
out how the strategy works, let’s take a look at what forward contract is.
1. What is an "Exotic Options"?
optioncontracts that are variations on simple puts and calls or are different products with optionality built into them.
Exotic options are available in various asset classes on which options are available, but are mostly found in the foreign exchange market. A common example is the barrier option, which itself comes in various forms such as knock-in options
1. What is KIKO?
- KIKO is one of options.
- KIKO means “Knock-In, Knock-Out” Option.
If exchange rate touch KO barrier, contract is invalid.
Whereas if exchange rate touch KI barrier, KIKO holders have to sell US$ below the current rate.
- KIKO Option Profit & Loss Structure
2. Why they signed KIKO?
- During 2006~07, stronger Won reduced earnings for exporters.
- They predicted s