1. Definition
1. Definition of Exotic Options
An option that differs from common American or European options in terms of the underlying asset or the calculation of how or when the investor receives a certain payoff.
└>related to the features of Exotic Options, next slide
These options are more complex than options that trade on an exchange, and generally trade over the cou
investors to understand how a company's operations are running, where its money is coming from, and how it is being spent.
Due to the accrual accounting, the income statements released each quarter may not necessarily reflect changes in their cash positions. For example, if a company lands a major contract, this contract would be recognized as revenue (and therefore income), but the company may
liquidity problems. A drop in account receivables implies a decrease in quick assets, and such decrease maybe critical for some companies that does not have enough financial resources to pay back the upcoming current liabilities. This is why Xerox announced that it has set aside reserves for these subsidiaries, in an attempt to alleviate the investors’ anxiety about the company’s liquidity.
investors’ anxiety about the company’s liquidity.
4. What is the journal entry needed to estimate and recognize the uncollectibility of some accounts receivables?
When account receivable is recognized to be uncollectible, it means that this account should decrease its book value. Therefore, the contra-account, the allowance for bad debts or the provision for bad debts, should recognized
sentiment in China.
5. APPLYING CASE INTO RATIONAL ACTOR MODEL (ARROUND THE NOTION OF ‘LESS COST, MORE EFFECT’)
To judge whether the United States’ decision to sell weapons to Taiwan was rational choice or not, we try to apply a ‘Rational Actor Model’ framework here. A relevant one of principles of this framework is that a country has tendency to make a decision rationally. This me