85 lines
2.1 KiB
Plaintext
85 lines
2.1 KiB
Plaintext
Index • 309
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Expiration of options, 187
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Explicit forecast stage, 93–96
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Exposure:
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accepting, 14, 18–20
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canceling out, 18–20
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gaining, 13, 18–20
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notional, 173
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tailoring level of, 24
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(See also Ranges of exposure)
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Exposure-accepting strategies,
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211–232
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margin requirements for, 211–212
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short call, 220–230
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short put, 212–220
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short straddle, 230–232
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short strangle, 231–232
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Exposure-gaining strategies, 187–209
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and expiration of options, 187
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long call, 189–201
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long put, 201–205
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straddle, 208–209
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strangle, 205–207
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Exposure-mixing strategies, 233–262
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collar, 258–262
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covered call, 240–248
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long diagonal, 235–237
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and OTM vs. ATM options, 233–234
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protective put, 248–258
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short diagonal, 238–240
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Exxon, 299n4 (Chapter 5)
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F
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False precision, 93, 96–97
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Fama, Eugene, 42
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Fat-tailed distribution, 45
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FCFO (see Free cash flow to owners)
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“Fight or flight” response, 118
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Financial crises, 302n2 (Chapter 11)
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Financial leverage:
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defined, 285–286
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investment vs., 164
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and level of investment leverage,
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197–199
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Financial statements, xv
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Flexibility (with option investing), 20–28
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Float, 185
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Ford, 103, 272
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Forward prices:
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adding ranges to, 36–39
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calculating, 34–36
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defined, 35–36
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ranges of exposure and, 50–56
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Forward volatility:
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choosing forward volatility number,
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156–160
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defined, 59–61
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and strike–stock price ratio, 67–74
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Free cash flow to owners (FCFO):
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defined, 82
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and drivers of value, 111–112
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in joint ventures, 84
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and supply-side constraints, 83
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Front-month contracts, 270
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Fungible assets, 272–273
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G
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Gains, levered vs. unlevered, 165
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Gaussian distribution (see Normal
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distribution)
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GDP (gross domestic product),
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104–108
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Gillette Razors, 84
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GM, 272
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Goals, for hedges, 257
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“Going long, ” 10, 21
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“Going short, ” 21
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Golden rule of valuation, 77–89
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cash flows generated on behalf of
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owners in, 80–82
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and definition of assets, 78–80
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and drivers of value, 91–92
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and economic life of company, 82–86
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and summing cash flows from
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different time periods, 87–89
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Google, 84, 127–130, 190
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“Greeks, ” xiv, 295n3 |