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1. What is the consumer price index and how does it work?
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AFLW 2024 - Round 8 - Chat, game threads, injury lists, team lineups and more.
Tertiary and Continuing Teach me economics
- Thread starter Brad Roo
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People go around and get the prices of certain goods and services (they call them basket goods) from major cities in Australia and compare the prices to last years prices.
It shows the increases in prices ie inflation.
I havent done econs for a while
I can actually say I enjoyed what I learnt in econs.
It shows the increases in prices ie inflation.
I havent done econs for a while
I can actually say I enjoyed what I learnt in econs.
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Thanks.
2. In stock market terms, what is a derivative?
2. In stock market terms, what is a derivative?
carltonblue
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ha!
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Is that some kind of clever academic know all humor?
carltonblue
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Nah its the year12 maths that I see I on the blackboard and in the textbook every day yet fail to understand
saved me so many times
3. Are derivatives and similar market bets remotely productive?
Not a snarky question. Genuinely curious to know whether they're meant to provide any benefit beyond whoever wins the "agreement".
Now, if you don't mind, I'm off to make an "agreement" with the TAB.
Not a snarky question. Genuinely curious to know whether they're meant to provide any benefit beyond whoever wins the "agreement".
Now, if you don't mind, I'm off to make an "agreement" with the TAB.
SJ
Premium Platinum
Very useful in hedging.
I was taught in finance that a company may offer its CEO's a lot of options in the company to encourage them to work harder.
If they do well the value of the company will rise therefore their options are worth more to them, if not they become worthless.
The companies value increasing is not only beneficial for the CEO who benefits via the options he was given but also to the owners because they now have a company making a better profit and is worth more money to them.
This is why we see a lot of employer share schemes. Pretty good incentives IMO.
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3. How do derivatives work?
Good for risk management.
Say you are a gold producer and it costs you $400/oz to get it from the ground to the buyer.
Gold price is volatile and may waver between $500/oz to $2,000/oz. You tell yourself, "I'm in the business of refining gold, not betting on the direction of the price of gold, that is what a speculator does".
So you go to a market (futures, etc) and lock in a price you are happy with, and go about your business of finding and selling gold, without concern about the volatility in the price of gold. You lock in your profit, but forgo potential monster profits from very high gold prices.
The speculator takes on this risk for you, and expects to make a profit in doing so.
The use of derivatives is useful in such examples. It is when financial instutions start making huge non-regulated bets (look up credit default swaps) which cause the whole system to fail when one major party defaults that derivatives actually result in the system becoming more risky, rather than less risky, as a result of their overuse, and counterparty risk.
Danog
17 19 & 20 - Dynasty
I'm doing intermediate microeconomics at Melbourne Uni at the moment. Advice for cramming? Exam is on Thursday and I know little.
Learn to draw any models you were taught perfectly then use them at any given opportunity - then just talk crap.
ObaMartins
All Australian
If you can draw the diagrams, they will love it and give you almost full marks no matter what shit you dribble.
SJ
Premium Platinum
Do you have Freebairn?
SJ
Premium Platinum
Nah, that's moreso macro.
