Sam Houston has bought 100 oz of gold at $1150 an oz. He has sold

Sam Houston has bought 100 oz of gold at $1150 an oz. He has sold call options on 30 oz of gold, with exercise price $1200, for $25 each; and options on 40 oz of gold, exercise price $1175, for $50 each. All options will expire after 6 months and then Houston will liquidate his position. Houston expects the price of gold after six months to be $1187.50 an oz. He uses 12%, continuously compounded, as the discount rate. Calculate the NPV of this hedge.

Module Project Proposal Assignment: A first Project Proposal

Module Project Proposal Assignment: A first Project Proposal submission of around 1,000 words in required in 25th Sep 2011 morning. In this, you will be expected to:,• Describe the scope, aims and objectives of the Module Project, as related to your chosen organization (my preferable is bank) and with reference to each proposed chapter of your final Project submission.,• Demonstrate an understanding of links to the related underlying academic literature that you will reference in your final Project.,• Describe key steps and milestones for your ongoing and planned research plus how you are planning to achieve these by your final module deadline which is 7th Oct 2011.,,I have attached complete project details. ,,Please noted no plagiarism.

You are the investment manager for Barrett Bank. Prepare a word

You are the investment manager for Barrett Bank. Prepare a word report for the board of directors explaining the investment portfolio management. Be sure to include an explanation of the following: ,,Is portfolio management important to investment management? Why or why not? ,,,,

6. Common-Size Financials: One tool of financial analysis is

6. Common-Size Financials: One tool of financial analysis is common-sized financial statements. Why do you think common-sized income statements and balance sheets are used? Note that the accounting statement of cash flows is not converted into a common-sized statement. Why do you think this is?

Fed WatchingLike many other investors, you are a “Fed

Fed Watching,,Like many other investors, you are a “Fed watcher,” who constantly monitors any actions,taken by the Fed to revise monetary policy. You believe that three key factors affect,interest rates. Assume that the most important factor is the Fed’s monetary policy. The,second most important factor is the state of the economy, which influences the demand,for loanable funds. The third factor is the level of inflation, which also influences the,demand for loanable funds. Because monetary policy can affect interest rates, it affects,economic growth as well. By controlling monetary policy, the Fed influences the prices,of all types of securities.,The following information is available:,• Economic growth has been consistently strong over the past few years but is beginning,to slow down.,• Unemployment is as low as it has been in the past decade but has risen slightly over,the past two quarters.,• Inflation has been about 5 percent per year for the past few years.,• The dollar has been strong.,• Oil prices have been very low.,Yesterday, an event occurred that you believe will cause much higher oil prices in the,United States and a weaker U.S. economy in the near future. You plan to determine,whether the Fed will respond to the economic problems that are likely to develop.,You have reviewed previous economic slowdowns caused by a decline in the aggregate,demand for goods and services and found that each slowdown precipitated a loosemoney,policy by the Fed. Inflation was 3 percent or less in each of the previous economic,slowdowns. Interest rates generally declined in response to these policies and the,U.S. economy improved.,Assume that the Fed’s philosophy regarding monetary policy is to maintain economic,growth and low inflation. There does not appear to be any major fiscal policy forthcoming,that will have a major effect on the economy. Thus, the future economy is up to the,Fed. The Fed’s present policy is to maintain a 2 percent annual growth rate in the money,supply. You believe that the economy is headed toward a recession unless the Fed uses a,very stimulative monetary policy, such as a 10 percent annual growth rate in the money,supply.,The general consensus of economists is that the Fed will revise its monetary policy to,stimulate the economy for three reasons: (1) it recognizes the potential costs of higher,unemployment if a recession occurs, (2) it has consistently used a stimulative policy in,the past to prevent recessions, and (3) the administration has been pressuring the Fed to,use a stimulative monetary policy. Although you will consider the economists’ opinions,,you plan to make your own assessment of the Fed’s future policy. Two quarters ago,,GDP declined by 1 percent. Last quarter, GDP declined again by 1 percent. Thus, there,is clear evidence that the economy has recently slowed down.,Questions,1. Do you think that the Fed will use a stimulative monetary policy at this point?,Explain.,