Custom Finance Essays
Finance Custom Essays: Optimal Hedge Ratios
Naive or one-to-one hedge assumes that futures and cash prices move closely together. In this traditional view of hedging, the holding of both the initial spot asset and the futures contract used to offset the risk of the spot asset are of equal magnitude but in opposite direction. In this case the hedge ratio (h) is one-to-one (or unit) (-1) over the period of the hedge.
This approach fails to recognize that the correlation between spot and futures prices is less than perfect and also fails to consider the stochastic nature of futures and spot prices and resulting time variation in hedge ratios (Miffre, City University). The beta hedge recognizes that the cash portfolio to be hedged may not match the portfolio underlying the futures contract.
With the beta hedge strategy, his calculated as the negative of the beta of the cash portfolio. Thus, for example, if the cash portfolio beta is 1.5, the hedge ratio will be -1.5, since the cash portfolio is expected to move by 1.5 times the movement in the futures contract, where the cash portfolio is that which underlies the futures contract. The traditional strategy and the beta strategy yield the same value for h (Butterworth and Holmes 2001).
Finance Custom Essays: High Dividend Company
The theory of dividend is least complete and confusion surrounds the dividend decision. It can be because it is the kingpin to investments and financing decision. Does dividend really matters? Does high dividend shows the growth of company in future? What really dividend conveys? How much should be the dividend or no dividend? Does the value of firm is effect by dividends or change in dividend policy? There can be a long list of questions and no simple answer will gratify these questions.
In MM (1961) theory it argues that dividend is an important facet of firm valuation in the perfect market with some assumptions where as Myron Gordon (1959) contradict on the latter issue and argues that dividends are irrelevant to the firms valuations it supported is with the model so free cash flow where the dividend is not considered for the calculation.
According to Brennan, Michael these two different arguments of MM theory and Myron Gordon leave mind set on doubts and unresolved questions left in a quandary: both authors develop plausible theories from reasonable assumptions, but mystifyingly reach opposing conclusions.1 Many researchers have devised theories and provided empirical evidence regarding the determinants of a firm's dividend policy.
The UK's original provider of custom finance essays...
Using our custom finance essay writing service will give you that academic edge you deserve whilst studying at university.
Just imagine having a 100% unique model answer to your exact essay question:
- No more sitting in the library for hours on end
- No need to worry about the grade you may get
- Deadlines will become more manageable
With our help, you will be able to sit back and relax in the knowledge you have the UK’s original provider of custom essays at your service, also backed with the highest guarantees in the industry, including:
- £5,000 No Plagiarism Guarantee
- Fully Confidential Service
- Completed On Time or your Money Back
- Guaranteed to be of a 1st class, 2:1 or 2:2 standard (as ordered)
- We only use Qualified Writers
- Find out more about our guarantees – Click here…
Every custom finance essay will come complete with:
- Plagiarism Report
- Fully Referenced
- 7 Day Amendments Period
Still not sure whether to order a custom finance essay?
- The BBC reported in 2008 how we were now that good that - "parents are helping their children buy custom essays from us!"
- In 2008 the Student Newspaper of Manchester University bought an essay from us - "This is a good essay and worth a high First - 75%!"
- "In 2003 the Sunday Times bought an essay (undercover!) and reported how the essay was confirmed to be of a 2:1 standard by a top lecturer they had selected!"
- Read more in our press section – Click here…
Do you have any questions?
Call our friendly UK team and discuss your needs confidentially on 0115 966 7955.
Ordering a custom finance essay...
Ordering your custom finance essay couldn’t be simpler:
- Place your order below;
- Pay online using our secure online payment system;
- You will then be sent a password so you can log-in to our secure customer control panel;
- Once we have found you the best writer possible, we will let you know and the work will begin;
- Once the work has been completed simply download it from our secure customer control panel.
So what are you waiting for? Order your custom finance essay today!
All of the essays in the free essays section were written by students and then submitted to us to display and help others. Thanks to all the students who have submitted their essays to us. You should not hand in our essays as your own. We do not condone plagiarism! If you need custom essay help, then have a look at our essay writing services.