GEB3373Feb14Notes - GEB3373 Hour 1 and 2 February 14th 2012...

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GEB3373 Hour 1 and 2 February 14th 2012 Nokia Symian technology used in smart phones and other devices that Nokia Makes. Planning to phase this technology out of its devices by 2016. With fewer complements no new apps will be created using the existing technology, which will cause a shift in the demand curve to the left. Nokia ʼ s Operations: Finland Hungary Mexico South Korea Beijing Shutting down factories due to excess capacity Shifting to South Korea and Beijing to increase their supply chain ef±ciency They are not doing this for Factor Price Equalization The new operations will make implementing designs and concepts easier This is an example of vertical integration, by taking over the entire supply chain from development to production to the ±nal product A demonstration of the OLI eclectic model Nokia ʼ s Jobs: End of 2010 - 66,000 Today - 52,000 Cut to - 48,000
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Overnight Interest Rates: Interbank Offered Rates - The short term interest rates banks use to lend one another. Federal Funds Rate - example Short term Rates: LIBOR - London Interbank offered rates EURIBOR - European Interbank offered rates TIBOR - Tokyo Interbank offered rates Determinants of rates: Supply and Demand Law of Demand and Supply: If Qd exceeds Qs, the price will increase If Qs exceeds Qd, the price will decrease Derivatives: Assets tied to other assets Options Put/Call Credit Default Stops, CDS Ex - Options on National Debts, Italian Debt, Greek Debt, etc. LIBOR: ICAP surveys banks asking reports on the going rates of interest over 12 day periods. Temptations arise which allows the traders who are surveyed to essentially design the law of Demand and Supply. Buying derivatives: Insider trading allows a few individuals to manipulate the market by betting on interest rates increasing in price, as these rates increase, a small number of people make a large amount of money.
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The traders who manipulate these markets do so by designing the law of
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This note was uploaded on 03/12/2012 for the course GEB 3373 taught by Professor Crum during the Spring '10 term at University of Florida.

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GEB3373Feb14Notes - GEB3373 Hour 1 and 2 February 14th 2012...

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