case08 - Introduction to derivatives Fall 2011 BUSI 588...

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Unformatted text preview: Introduction to derivatives, Fall 2011 BUSI 588, Case 8 Aureliano Buend´ ıa and hedging Please prepare for class discussion on Wednesday, 9/21. Colonel Aureliano Buend´ ıa, now managing director of UBS (Ursula Banking Services), is working late on this hot summer day in Macondo. “So today, of all days, the only technical guy in the office decides to quit. Who is going to place the orders for the hedging? Volunteers?” Florentino, knowing you will be visiting Macondo this evening, steps up to the plate: “At your service Colonel, my years as a tree-cutter black-hole cleaner will come in handy for this hedging business. Just tell me what trades we put on today.” Colonel Aureliano Buend´ ıa admits the truth “Actually, I do not remember even how many sons I have, how can I remember what the firm traded on today? I do know we took a couple of positions in copper today, so just make sure we are delta-hedged on copper.” After looking over the books an accountant called Melqu´...
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This note was uploaded on 11/25/2011 for the course BUSI 588 taught by Professor Staff during the Fall '10 term at UNC.

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