FINM7406 - International Finance - European Option Pricing Formula - The United Kingdom introduced the Modern Slavery Act - Finance Assignment Help

Assignment Task:

FINM7406: International Finance Assignment Help

Part 1 - In class, we covered the elements of basic options pricing. Read the section titled “European option-pricing formula” on p191 and 192 of the textbook, which describes option pricing in more detail.

a) In the next step, you will be calculating the call price based on what you have read on p191. Please provide a snapshot for the option you are pricing, including the currency and expiration month. You will need quotes for St, Ft, r$ and ri. Find quotes for each of these inputs, describe where you found them and why you chose the quote you used.

b) Based on formulas 7.12 to 7.14 on p191, calculate the call price for your selected option (in USD). Make sure you show all your calculations, including all formulas and how you calculate d1 and d2. Note: the option volatility (σ) can be found on the Nasdaq website where you found your option quote by clicking on your chosen option, and is titled “Impvol”.

Part 2 –In 2015, the United Kingdom introduced the Modern Slavery Act. Part 6 of this legislation requires commercial organizations to produce a statement on the actions taken to ensure their operations are not exposed to human trafficking and slavery. This legislation applies to any organization with annual turnover of £36 million and that has any part of its business in the UK. In 2018, Australia also passed a Modern Slavery Act which will come into effect this year. The Australian legislation took many of the elements of the UK legislation. In this section you will be doing some background research on the UK legislation.

a) What is modern slavery and how prevalent is it in the world today? 

b) Choose a company that is a constituent of the FT100. Is this company likely to have a high or low risk of slavery in its supply chain? Justify your answer. Make sure you include the name of your company and a short description of its business in your answer.

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