When it comes to options, they have in use ever since the time of Aristotle, someone you read about only in books these days. Even the earliest option that was chosen was not related to finance but instead was a real choice. In fact, Aristotle himself recorded all of it. The story was about someone named Thales who was from Milesianand was also a philosopher in Greece. The story went thus:
Thales had decided to agree with some of the conditions set by the masters of the olive trees located in his region. The condition that was set was this: In return for a meagre amount of money which was to remain in deposit, he would be allowed to make a lease of all the presses that took place at market price. This was of course, to take place when the harvest takes place. It eventually turned out that Thales was right about his estimation and in turn, earned a ton of money for himself.
Several centuries after this event took place, in the year of 1688, someone by the name of Joseph de la Vega wrote in his book how these ‘options’ were being traded in The Amsterdam Stock Exchange. There was a good chance that he had realized the relations between these different options and the potential to earn money from them. However, it was only later until 1973 that there was a real establishment which offered options in exchange for monitory benefits. Some countries consider this act as gambling and as such, have banned them permanently.
Links of Previous Main Topic:-
- Introduction of corporate finance
- The time value of money and net present value
- Stock and bond valuation annuities and perpetuities
- A first encounter with capital budgeting rules
- Working with time varying rates of return
- Uncertainty default and risk
- Risk and return risk aversion in a perfect market
- Investor choice risk and reward
- The capital asset pricing model
- Market imperfections
- Perfect and efficient markets and classical and behavioral finance
- Capital budgeting applications and pitfalls
- From financial statements to economic cash flows
- Valuation comparables financial ratios
- Corporate claims
- Capital structure and capital budgeting in a perfect market
- The weighted cost of capital and adjusted present value in an imperfect market with taxes
- What matters
- Equity payouts
- For value financial structure and corporate strategy analysis
- Capital structure dynamics firm scale
- Capital structure patterns in the united states
- Investment banking and mergers and acquisitions
- Corporate governance
- International finance
Links of NextΒ Financial Accounting Topics:-