Category: Writing

PGBM01 Assignment Structure and Requirements Prepared by Ibn Wahab Benin Workshop tutor Part A: Ratios Analysis and Discussions Task 1 Profitability, Liquidity, Gearing, Asset utilisation, Investment Students are expected to show a working knowledge of the various financial ratios. I suggest that students create a table and deliver work on the table. For example Ratios Appendix Working Answers Only Trends:Changes 2021-2020 2020 2021 Profitability 1 2 3 Liquidity, 1 2 3 Gearing 1 2 3 Asset utilisation 1 2 3 Investment 1 2 3 Task 1A A structured report for the Board of Unilever PLC on their financial performance and position based on the financial Ratios results. Students are expected to discuss the various financial ratios analysing results using trend and cross-sectional evaluation of Unilever’s financial operations. For example, to demonstrates the trend of Unilever’s financial performance from 2020 to 2021. Indicate the percentage or the actual change in the various financial ratios results from year to year. Additionally, compare Unilever’s financial performance to its competitors in the same industry, which demonstrate the cross-section analysis. It would be best to discuss various ratios one after the other—for example, Profitability Ratios discuss different individual ratios and why they were changes. Task B: Breakeven of sales in the unit and cash, Contribution margin ratio, and Operating leverage. Students are expected to provide and show working for breakeven sales and revenue by following the procedure in the lecture note. It would help if you additionally had shown working on how you arrived at the contribution margin ratio and the operating leverage. I will suggest students show working in the table. You must identify fixed costs, variable costs, quantity, and revenue which can guide you effectively in calculations. Discuss each metric and how the Breakeven point impacts on Profitability ratio. Students are expected to discuss and compare the results to the individual profitability ratios. The impact of the contribution margin can be compared to the gross probability ratio, and the influence of the operating leverage can be compared to the operating profit ratio. Part B: Investment Appraisal and Decision making. Payback Period. Payback Period Year Cash flows Cumulative Deductive Cash Flow 0 1 2 3 4 5 6 Please demonstrate in the table how you got the figures. Based on the statistics, decide with evidence based on the table reasons why you chose one project over the other. The Discounted Payback Period. Year Cash Flows Discounted Factor Discounted Cash Flows Cumulative DCF 0 1 2 3 4 5 6 Please demonstrate in the table how you got the figures. Based on the statistics, decide with evidence based on the table reasons why you chose one project over the other. Accounting Rate of Return. Year Cash Flows Depreciation Profit 1 2 3 4 5 6 Please demonstrate in the table how you got the figures. Based on the statistics, decide with evidence based on the table why you have chosen one project over the other. Net Present Value Year Cash Flows Discount Factor Present Value 0 1 2 3 4 5 6 Please demonstrate in the table how you got the figures. Based on the statistics, decide, with evidence based on the table, reasons why you have decided to choose one project over the other one. The Internal Rate of Return (to two decimal places) Year Cash Flows Dis.F1 PV1 Disc.F2 PV2 0 1 2 3 4 5 6 Please demonstrate in the table how you got the figures. Based on the statistics, decide with evidence based on the table reasons why you chose one project over the other. Task 2B: Critically evaluate each investment’s key benefits and limitations. Students are expected to discuss the benefits and limitations of each investment appraisal technique. This should not be listed and explained but instead discussed them. Make sure you discussed at least four benefits and at least four limitations of each investment appraisal technique. Task 2C: Critically discuss factors that Blue-drum PLC should consider choosing between making or buying the ‘Blue-drums’. Students are expected to provide working knowledge on making blue-drum using the cost information provided and compare that to the external supplier cost. Hint: fixed fee is not considered and should not be added to the price of making blue-drum. After calculating the cost of making blue-drum and comparing your cost figure to the external supplier’s fee, you can now decide whether to drive or buy from the supplier. Please do provide reasons for your decision. I will suggest student should create a table. E.g. Blues-drum Cost items Make Outsource Task 2D: You are also required to critically evaluate three relevant factors to be considered for suitable sources of finance to fund the Blue-drum investment compared to the unlisted PLC supplier of plastic Blue-drum. Students are expected to discuss not to list suitable and applicable sources of finance for the blue-drum project. Hint: please do know all companies can use not all sources of finance. PLCs can use all sources of finances, but non-PLC can use a limited source of references. Additionally, the size (cost)of the project should be considered in sourcing finance. Students should endeavour to critically discuss individual sources of finances, not just list and describe them. Part C: Budgeting and Financial Plan Task 3A: Critically evaluate the impact of the budgeting process on any potential project and demonstrate how budgets, objectives, and strategic plans are related. Students are expected to discuss how budgeting can help and facilitate strategic planning in any project. Additionally, students are expected to demonstrate how budgetary processes can guide the company to achieve the project objectives. Please provide critical discussion, not descriptive. Task 3B: Briefly discuss the significance of the Business plan and analyse critical elements of its financial plan section of a proposed business plan. Students are expected to demonstrate the application business plan and its importance. Additionally, you need the indicate an emphasis on the financial section of a business plan. Hint: discuss the importance of a business plan in achieving high profit, sourcing finance, cost estimate, in revenue generation. Importance notes: This is a piece of academic writing report. Students must show a high level of criticality by research and demonstrate and establish evidence with supporting arguments. All arguments and evidence must be well-cited and referenced.
Attachments:
10450325_1_part-a-ratios-analysis-and-discussions.pdf

Coursework 2023 Question 1 (Marks: 20) A Credit Default Swaps(CDS)1 is a contract where one party (credit protection buyer) pays the other one (credit protection seller) a fixed periodic coupon for the life of the contract on a specified reference asset. The party paying the premium is effectively buying insurance against specific credit events, such as default, bankruptcy or failure-to-pay or debt restructuring. If such a credit event occurs, the party receiving the premium makes a payment to the protection buyer, and the swap then terminates. Consider now that party A wishes to get covered from a potential loss of the face value (????) of an asset in case of a credit event. Hence, party A decides to purchase today (??0 = 0) some protection from party B that lasts until some specified maturity date ??. To pay for this protection, party A makes a regular stream of payments to party B. The size of these payments is a fixed percentage of the face value of the asset being insured and it is based on the yearly contractual spread ??1??, which represents the percentage used to determine the payments’ amount over one year. The payments are made every 3 months until maturity of the contract or until a credit event occurs, whichever occurs first. Assume that the credit event occurs as the first event of a Poisson counting process2 and hence default time is exponentially distributed with parameter ??. Denote the short rate with ??. The aim is to value the premium leg, i.e. to write a mathematical expression for this stream of payments taking into account both the appropriate discounting and the probabilities of default events. a) Illustrate the problem with a sketch representing the various payments occurring over the considered time period. Make sure you include the time at which the payments are made and the size of each undiscounted payments. b) Express the discounting factor at time ???? , where ?? ? {0,1, … , ??}. c) Express the probability that a credit event occurs before time ???? (?????? ??) and the survival probability at time ???? , i.e. the probability that no credit event has occurred before time ???? (?????? ????). d) Using the above, write down the full expression for the premium leg. e) Using the values that correspond to your Group, calculate the premium leg and price the CDS. 1 https://en.wikipedia.org/wiki/Credit_default_swap 2 https://en.wikipedia.org/wiki/Poisson_point_process Question 2 (Marks: 30) Let ???? be standard Brownian motion. Consider the following stochastic processes: i. ???? = ??0 + ???? + ?????? ii. ???? = ??0?????? {(?? – 1 2 ?? 2 ) ?? + ??????} a) Use Itô’s lemma to derive the Stochastic Differential Equation (SDE) for (i) and (ii). Discuss the main difference of the two models. b) Obtain monthly (recent) data3 for the price of the stock that corresponds to your Group for three years. Calculate the continuously compounded return of each month and then find the mean and the standard deviation of the return. c) Determine the historical volatility and estimate the expected return by assuming it equal to the annualized average return. d) Select an option4 (near the money, middle June) with underlying asset the stock that corresponds to your Group. Given the spot price of the stock (??0) and the duration to expiry (??????) of the option, simulate ten different paths for each of the models (i) and (ii) using 100 discretisation points. Present your findings in two separate figures, where you may also incorporate a short part the stock price’s recent history (not more that ??????/2). e) Use the Black-Scholes-Merton model to calculate the implied volatility for the stock that corresponds to your Group using the details of the option you selected in (d). Discuss the difference between historical and implied volatility. Note: For the risk-free rate you can use the United States 52 Week Bill Yield5 . 3 Go to https://finance.yahoo.com/, search for the symbol, go on the “Historical Data” tab, select “Monthly” frequency and download the data. 4 Go to https://finance.yahoo.com/, search for the symbol, go on the “Options” tab, filter for the proper dates. 5 https://tradingeconomics.com/bonds General Remarks for the Coursework: • The report must be created using MS Word and you are advised to use MS Excel. • You should submit your report in PDF format and a supplementary XLS(X) file, containing all the required calculations. • Mathematical expression should be typed using “Equation Writer” (Insert -> Equation). • In the cover page of the report include personal details, coursework details, university logo, date. • Include a summary page of the key data where you have based your calculations along with their source and the retrieval dates. Include also screenshots of the websites in an Appendix. • Take the required screenshots before you start working with data (Q2 & Q3) • Start answering each question on a new page. • The structure and organization of the report and the supplementary file are among the quantitative indicators. Question 3 (Marks: 50) For the stock that corresponds to your Group, select an option expiry date among the available ones in the market so that ?? > 0.5 years. Given the spot price of the stock (??0), select three strike prices ??1,??2 and ??3 near the money such that ??1 < ??2 < ??3 6. a) Pricing Call and Put options with strike price ??2 and maturity ?? (in detail calculations). The time horizon should be divided into 5 intervals of duration ?????? each. Consider that the stock price may increase by ???? and decrease by ???? on each time interval. The volatility of the stock price is the historical volatility found in Question 2, part (c). - Calculate analytically the ?? * probability - Draw the binomial tree for the stock price evolution - Provide and explain the formula of calculating the probabilities of reaching each node - Price the European Call and Put Options (show the required trees; explain) - Price the American Call and Put Options (show the required trees; explain) - Comment on the difference of the premiums b) Pricing Call and Put options with strike prices ??1,??2 and ??3 and maturity ??. The time horizon should be divided into 15 intervals now of duration ?????? each. Consider that the stock price may increase by ???? and decrease by ???? on each time interval. The volatility of the stock price is again the historical volatility found in Question 2, part (c). - Calculate analytically the ?? * probability - Price the European Call and Put Options of strike price ??1 7. - Price the European Call and Put Options of strike price ??2. - Price the European Call and Put Options of strike price ??3. - Compare the European Call and Put premiums for strike price ??2 of (a) and (b) - Explain the difference between the calculated premiums and those in the market. c) Given the premiums ???? and ???? (?? = 1,2,3) that correspond to the options with strike prices ??1,??2 and ??3 that have been already calculated, built the following trading strategies and discuss their suitability: - Option (??2) and underlying asset. i) Covered Call and ii) Protective Put - Multiple options (??1,??3) of the same type. i) Bull Spread with Calls and ii) Bear Spread with Puts - Combinations. i) Strip (??2) and Butterfly Spread (??1,??2,??3) Note: For the risk-free rate you can use the United States 52 Week Bill Yield8 . 6 Go to https://finance.yahoo.com/, search for the symbol, go on the “Options” tab, filter for the proper dates. 7 Include also a table with values of the terminal nodes (stock price, probability, option value). 8 https://tradingeconomics.com/bonds https://goodcalculators.com/historical-volatility-calculator/ https://www.wallstreetmojo.com/realized-volatility/ https://www.wallstreetmojo.com/implied-volatility/ https://goodcalculators.com/black-scholes-calculator/ https://www.wallstreetmojo.com/risk-free-rate-formula/ https://www.wallstreetmojo.com/what-are-treasury-bills/ https://www.treasurydirect.gov/instit/annceresult/annceresult.htm https://www.bloomberg.com/markets/rates-bonds/government-bonds/us https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/52-week-bill-yield https://www.barchart.com/options/highest-implied-volatility http://people.stern.nyu.edu/adamodar/pdfiles/cfovhds/webcasts/riskfree/riskfree.pdf [Historical volatility calculator], [Realized volatility], [Implied volatility], [Black-Scholes calculator], [Risk-free rate formula ] Attachments: 10450280_1_epm947-cw-2023--1-.pdf

Group 7 Prospect Evaluation Knowing that you are taking the Petroleum Economics and Policy module at the University of Dundee, Mr. Oilfinder, President of Star Oil Company, decided to hire you to advise him whether to drill a fully-owned exploratory well in a prospect. Based on the seismic data, he estimates the probability of finding a recoverable oil reserve is greater than 50%. The following table gives the probability distribution of each possible outcome. Possible Outcome (size of proven reserve) Dry Hole 100MB 160MB 180MB Probability of Occurrence 0.2 0.35 0.3 0.15 (Note: M=1000) You are also told that the cost of drilling the exploratory well is US$1.2MM. If oil is found, then the development cost is assumed to be proportional to the size of the reserve at US$15/Bbl. The lifting/operating cost is US$10 per barrel of oil produced. For simplicity, Mr. Oilfinder further asks you to assume: 1) All exploratory effort will take place in year 0; 2) If oil is found, then it takes another two years (year 1 & year 2) to develop the oilfield and to reach peak output capacity. The peak capacity is targeted at 1/10 of total proven reserve. The development cost is to be equally spreaded between the two years. The output in year 1 is 50% of the peak capacity. 3) Once the output reaches its peak capacity, it will stay at plateau for two years (that is, the output in year 3 is equal to the output in year 2), then declines exponentially at the rate of 10% every year. 4) The proven reserve will be 100% recovered by the end of the project life. If one year’s average output falls below 1 B/D, then take that output to the previous year and the production stops (see the example on VLE). 5) The royalty is 10%. The cost recovery limit is 80% of gross revenue. The profit oil will be split 40/60 in favour of the government. The capital cost is straight-line depreciated within five years starting from production. 6) The corporate income tax is 25%. There are no other taxes. Mr. Oilfinder is a deep-pocket guy so that he will finance the exploration, development and production with his own money. However, if he uses his own money elsewhere, he could earn an annual rate of return of 9%. A. Please advise Mr. Oilfinder whether he should drill the well under the following crude oil price scenarios (all in 2022 real dollars). If you advise Mr Oilfinder to drill the well, please also calculate the government’s take and contractor’s take in each scenario. a. A constant price equal to the average Brent price over the last 5 years from 2018 to 2022. b. A constant price equal to the average Brent price over the last 20 years from 2003 to 2022. c. The crude oil price evolves according to Mu’s mean forecast (available on VLE). d. Calculate the price at which Mr Oilfinder will break even. NB: You need to calculate the expected monetary value (EMV) under each price scenario and use the opportunity cost of Mr. Oilfinder’s money to discount the cash flow. For simplicity (and uniformity), let’s calculate the NPV from year 1 (that is, don’t discount year 0’s cash flow). Assume year 0 is in 2022 and year 1 is 2023. Please report the NPV of each possible outcome, the EMV under each oil price scenario and give a one-sentence advice to Mr. Oilfinder whether he should undertake the project under each price scenario. Compare the three scenarios. You will notice that the average of Mu’s forecast is close to one of the historical price scenarios. B. Write a brief consultancy report to Mr Oilfinder advising him the likely trajectory of oil price and how it will affect his investment decisions. Your report should be evidence-based and referenced, no more than 1000 words, excluding references. Deliverables 1. A word document that contains: the consultancy report (approximately 3 pages, double-spaced with font size 12) and a brief summary of the EMVs and the comparison of results under each price scenario (= 2 pages). Please indicate each member’s contribution. For example, each member should write a portion of the consultancy report and contribute to the project evaluation. Alternatively, you could simply state that each member has contributed equally. 2. An Excel file containing your calculation.
Attachments:
10450265_1_group-7-assignment-.pdf

EAS-E141 Earthquakes and Volcanoes Name:__________________________________ Lab 5: Earthquake Location & Magnitude Determining Earthquake Location *adapted from Brophy & Hamburger Earthquakes and Volcanoes: Lab Manual and from Cronin & Tasa Earthquake Hazards Goals: • Learn to use seismogram readings to determine seismic wave travel time • Learn to use seismic wave arrival times to locate earthquakes Introduction Seismograms are the main tool used by seismologists (or those who study earthquakes). They contain the primary observational data that the scientists need to glean information on the earthquake sources, as well as on the propagation of seismic waves along the path from source to receiver. For nearby earthquakes, the main observables are: • Arrival times of P and S waves • Direction of wave movement • Amplitudes of waves • Seismic wave frequency These observables can, in turn, be used to determine the main parameters of the earthquake source: • Origin time of the earthquake • Epicenter location (latitude and longitude) • Focus (hypocenter) depth • Earthquake magnitude They also can be used to infer physical properties of the rock through which the seismic waves pass: • Velocities of P and S waves • Nature of the contacts between different rocks or faults In this laboratory, we will examine seismograms recorded by seismic networks in the Southwest Pacific. This remote part of the world, including the tiny island countries of Fiji, Tonga, and Vanuatu, is home to some of the most active earthquake belts in the world. Then, in the second part of this lab, we will use some “real-life” seismograms to determine earthquake parameters for several recent earthquakes. Part 1: Working with Seismic Wave Travel Times In general, P and S wave velocities within the earth vary strongly with depth, but only vary gradually with lateral position Within the earth’s crust, P-wave velocity varies from about 3–7 km/sec (or 7,000–16,000 mph!!), and averages about 5.7 km/sec. S-wave velocities vary from about 2–4 km/sec and average about 3.3 km/sec. Here we set P-wave velocity to be 6 km/sec and S-wave velocity to be 3.4 km/sec. Use these average seismic wave velocities to construct a travel -time chart for P-waves and S-waves. Question 1: Using the blank graph paper on the following page, first make a graph of distance versus P and S wave travel times, using the x-axis for distance in km, and the y-axis for travel time in seconds; next make a graph of distance versus S-P travel times differences, using the x-axis for distance in km, and the y-axis for travel time in seconds; As the distance between an earthquake and seismograph increases, the P- and S-wave travel times and the time delay between them, increases. Using the relations represented graphically on your travel-time chart above, answer the following questions. Show your work where needed. Question 2 If the “origin time” of an earthquake, known to be 9:00:10.0 from the world-wide seismic station reports, and the P-wave arrives at 9:00:34.0, how far away was the seismic station from that earthquake’s focus (hypocenter)? Question 3 If a seismic station reports a P-wave arrival at 2:45:42.0 and an S-wave arrival at 2:46:01.0, what is the distance to the focus? What is the origin time of the earthquake? Question 4 If a seismic station at a distance of 300 km from an earthquake records a first arrival at 12:18:53.0, at what time would you expect the S-wave arrivals to be recorded? Question 5 You are hanging out in the seismograph station here at IU on the first floor of the geology building, chatting on the phone with your friend from New Madrid, Missouri (distance = 380 km), when suddenly your friend interrupts your conversation with a scream, “Jupiter’s thunder!! We are having an earthquake!!!” You look down at the seismograph and notice that the pens are quiet. How long will you have to wait until the P-waves would be expected to arrive at Bloomington? The S-waves? P-waves: _______________________ S-waves: _____________________________ Part 2: Using Earthquake Arrival Times to Locate Earthquake Epicenters We now know how to determine the distance of an earthquake from a seismic station, but this information only gives us the distance, not the direction or location of the earthquake focus. For example. If we calculate that an earthquake occurred 100 km from a seismic station, we know that the earthquake occurred anywhere around a 1000 km radius from the seismic station. In the example below, the seismic station is shown with a triangle, and the radius along which the earthquake occurred is drawn: In order to determine the location of an earthquake, we need at least 3 seismic stations. This allows us to triangulate the location where all three circles meet. In this last part of the lab, we will determine the location of an earthquake epicenter. You are given a new S-P travel time plot for this which extrapolates the data to longer time periods than what you plotted in your S-P travel time plots. Note that the y-axis is in minutes rather than seconds. This new plot also includes the travel time of surface waves, but it is not necessary to use for this exercise. Surface wave travel time (do not use) S-wave P-wave You are also given three recordings of the same earthquake event recorded at three different seismic stations. One is Sitka, Alaska, another in Charlotte, North Carolina, and the third in Honolulu, Hawaii. Only the P and S waves are shown on this seismogram, the surface waves are cut off. Also note that the time on the x-axis is shown in hours:minutes. Step 1: Using the seismogram readings, determine the times that the P-waves and S-waves first arrived at each seismic station (try to be as accurate as possible; estimate to the nearest tenth of a minute) by filling in the following table. P arrival S arrival S–P (minutes) Sitka, AK Charlotte, NC Honolulu, HI Step 2: Using the new S–P travel time plot and the data you collected in Step 1, determine the distance from the epicenter in km for each seismic station. Sitka, AK: ________________ Charlotte, NC: ________________ Honolulu, HI:_______________ Step 3: On the map below, and using a drafting compass, draw a circle around each recording station. Make the radius of each circle equal to the distance from the epicenter determined in Step 2. Hint: use the scale on the map to set this radius on your drafting compass. The circles you draw should intersect at approximately one point on the map. This point is the epicenter. If the three circles so not quite intersect at a single point, find a point that is equidistant from the three edges of the circles, and use this as the epicenter. Question 6 Your three circles may not have intersected exactly at a single point. How could you improve your results? Sitka Charlotte Honolulu
Attachments:
10450244_1_attachment-1–45—1-.pdf