Stock Index Futures Prices Essay Example | Topics and Well Written Essays - 2000 words

Stock Index Futures Prices - Essay Example Arbitrage is also characterised as the simultaneous buying and selling of stocks in two separate financial markets with the intention of making profits generated by the difference between the buying and the selling prices of a commodity(Sackman, and Coltman 1996, 25). The carry cost can also be described as the interest expense paid by the investor to hold on to the commodity purchased in the futures market until the maturity date of the futures contract(Bjrk 2004, 1). Arbitrage will be further discussed below. Many investors prefer to funnel their scarce money resources into a cash and carry arbitrage contract. Their real goal would probably be to invest in two securities that are differently priced in the market. Later, the stock or futures prices of both commodities will correct themselves by either decreasing or increasing. This movement of prices would cause a profit on one commodity and a loss on the other commodity. Both these commodities will smoothen out resulting to the avoidance or decrease of probable future losses. The commodities where arbitrage can be used include sugar, gold, silver, coffee, oil, U.S. dollar currency, European dollar currency, Japanese Yen, French Franc, and other currencies (Scobie, Buckley, and Fox 1998, 8) In addition, the arbitrage investor may generate profits from investments if he or she invests in a security or in the futures contracts. The investor would then profit when the amount of the of the commodity plus the added cost of carrying is less than the projected commodities futures prices. One clear advantage of using arbitrage in the commodities futures market is that the investors can sell a commodity like the United States dollar today and then buy the same foreign currency four days after the currency purchase date. On the other hand, this is not possible in the real world. The real world transaction is characterised by a sales person turning over to the buyer the car, house, shirt, or computer game the moment when he or she pays for the items bought. Only when the sales price is higher than the investment price will the investor harvest the fruits from his or her arbitrage investment. In terms of the oil industry, "The oil industry, more than other energy sectors, is globa l in its character and operations. The geographical concentration of reserves and the vital role of oil in modern society has made it the principal commodity in international trade" (Haugland, Bergesen, and Roland 1998, 54) Evidently, the arbitrage investor may generate profits from investments if he or she invests in a security or in the futures contracts. Likewise, FRA influences prices. The currency exchange rate of the Eurodollar futures and American dollar Foreign Rate Agreements (FRA) high frequency data clearly indicates that the countless arbitrage opportunities are linked to the presence of stale FRA commodity prices as well as the oscillatory behavior of FRA quotes. And, Inter -market information flows are found to be of much shorter duration than previously reported with the futures market playing the dominant role in the information transmission process in the shorter -dated maturities. Many investors inject their money in short term interest rate futures and forward rate

Financial Report on Apple Company Essay Example | Topics and Well Written Essays - 5000 words

Financial Report on Apple Company - Essay Example novative products of the company are- Macintosh PC, iPhone, iPad, iPod, Apple TV, Xserve, software applications such as Mac OS, iOS operating systems, applications and contents on iTunes Store and a collection of support offerings. The company has appointed wide variety of channels such as company owned stores, online, direct sales; value added resellers, telecom operators, wholesalers, retailers to sell the products. The target markets for the company are education, enterprise, government institutions, and individual consumers. Apple has a strong supply chain and ethics in manufacturing which has led the company to increase its customer base and meet market demands. Apple has more than 46,600 full time employees and 2800 contract employees who work full time. The company has annual sales of US$ 65 billion and an annual growth rate of 47 % year on year. The company optimizes user experience through its products, services, software etc. The unique ability of the company to design and manufacture innovative products enables the company to make user experience simple and great adding the â€Å"wow factor† to it. Apple has grown manifold with introduction of iTunes for consumers, where third party applications can be installed. The experience and ease of use offered by Apple products has been the key unique selling proposition of the company. The company has a strong distribution network around the world to make its product available for consumers and also provide after sales service. The company is uniq uely positioned in the market as most innovative with its products of unique design and excellent user experience. The major area of focus for the company has always been research and development, marketing and advertising which allow the company to remain competitive in the market and offer products which add value to the life of consumers. The company employs unique selling points for its products which offer lifestyle to the end users. Apple has established a direct