The Black Scholes Option Pricing Theory

Portugal’s population is 10.7 million. Their unemployment rate is currently at 15.9%. Portugal is currently in a deep recession. In May 2011, Portugal accepted a €78billion (euro), $103billion (dollar), united European Union-International Monetary Fund plan. Portugal’s

Along with the most significant outcomes of the current crisis has been a sharp increase in the concern concerning national debt. Certainly, what nourishes debt accumulation is deficit expenditure. The 1996 era, and throughout 2001, show up as "golden years" from the time where distinct development was done in reducing accumulated debt2. Stuck between 2001 and 2007 that development was obliterated. Consequently, at the period of the crisis years 2007-2010, declining federal returns and attempts to fix the economy and financial system radically enlarged the debt to GDP ratio.

part of the assets that you, or a company, own. That, minus the liabilities, represents your net worth. The same is true of a

By the end of 2008, the European Union began experiencing rippling effects of the United States financial crisis. Several member countries, most notably on the southern end of the continent, faced high levels of debt and unemployment. Portugal, Iceland, Ireland, Greece, and Spain, derogatively referred to as “PIIGS,” required extensive economic support from the EU in order to repay government debts and bail-out private banks. Disbursal of aid in 2010 proved successful in promoting economic recovery in some countries; however, the vast majority observed only slight economic improvement which led to doubts regarding the effectiveness of the harsh austerity measures implemented. Ireland has most clearly benefited from the financial support of the European Union as the country’s unemployment rate has dropped below ten percent and is expected to witness 4.5% GDP growth in 2016. Portugal, on the other hand, shows little fiscal improvement as evident in an unemployment rate of 13% and an expected GDP growth of only 1.6% in 2016. Although both countries faced tough financial crises in 2010, Ireland has notably outperformed Portugal in resolving the situation. The weak economy in Portugal, as well as continued fiscal hardship in the remaining “PIGS” countries, threaten the preservation of the European Union as financial inequality between the members persists.

a- i) According to SCON 6 article 25, assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. Assets has three characteristics: it embodies a probable future benefit that involves a capacity or in combination with other assets, to contribute directly or indirectly to future net cash inflows, a particular entity can obtain the benefit and control others’ access to it and the transaction or other event giving rise to the entity’s right to or control of the benefit has already occurred.

7. All assets, both current and noncurrent, and all liabilities, both current and noncurrent, are reported in the government-wide financial statements.

The European sovereign debt crisis, which made it difficult or impossible for some countries in the euro area to repay or re-finance their government debt without the assistance of third parties (Haidar, Jamal Ibrahim, 2012), had already badly hurt the economies in “PIIGS”, Portugal, Ireland, Italy, Greece and Spain. This financial contagion continues to spread throughout the euro area, and becomes a dangerous threat not only to European economy, but also to global economy.

The European Sovereign debt crisis describes the era where various European countries were facing a government deficit which affected the Euro zone. There are numerous solutions that have been implemented to try eliminate this problem. One of the major solutions was the austerity fiscal policy which aimed to decrease the government expenditure in order to decrease the government budget deficit. This essay will outline the austerity policy and use the IS-LM curve to show how that was implemented by the Eurozone and the effect had on the Eurozone. This essay will furthermore outline the effect that the policy had and how it had an effect on the economy and the major effects and countries that triggered this crisis. The essay will then evaluate the effect that the monetary policy. This essay will then offer other recommendations on how to decrease the government budget deficit resulting in the economy returning to the natural rate of output.

The purpose of this paper is to provide an analysis of the Greek sovereign debt crisis that we witness during 2010-2014, its global impact and sustainability by examining GDP and the real interest rate. This paper will also examine that several members of the European Union such as Portugal, Italy, Ireland, Spain by comparing with Greece. These countries historically known as PIIGS with Greece. Also, this paper will analyze Argentina crisis by comparing with Greece crisis.

This policy memo addresses the current debt default crisis in Argentina. Despite the fact that 93% of the bondholders accepted reduced payment due to the bankrupt of Argentina, the two hedge fund NML Capital and Aurelius Capital Management have demanded full repayment of the $1.5bn (£920m) they are owed, and have sued to prevent the country from paying back only its restructured bond . To relief the dilemma after July’s ruling, the financial sector should persuade the 93% exchange bond holders waive the RUFO to alleviate the current financial pressure over the next few months.

Assets can be defined as economic resources owned or controlled by the firm that deliver a future benefit for a business. They are acquired by the firm as a result of a past event or transaction.

4. There is no capital for government units (which is the difference between assets and liabilities)

Currently the PIIGS (Portugal, Ireland, Italy, Greece, and Spain), whose GDP ratios are all well over 100%, are in danger of sinking the ship from the amount of debts they cannot pay (Cannon). The projected debt for Greece alone is 300 percent of GDP by 2060 according to IMF economists (Thomas). There have been riots, especially in Greece, which has fallen into yet another

o Long-term sovereign bonds are the core investment for long-horizoned investors, such as pension funds and insurance companies.

In addition, the impact of moderate debt reduction on fiscal adjustment program is discussed. If one takes the baseline scenario, a moderate reduction in debt stock does not significantly reduce the degree of austerity required. This is probably because Spain is suffering from high levels of private debt of households, companies, and Spanish financial entities, which has majorly accumulated as a result of the large real estate bubble. After the property market crash, Spanish banks and savings banks have been dependent on the Spanish authorities and European Central bank for covering most of its losses. There is uncertainty about the scale of future losses and its influence on the government’s budget. Moreover, since the domestic banking sector has a stake of in the 40% in debt, reduction in the principal value of government securities may lead to large losses on the bank's balance sheet, and threaten the stability of the domestic banking sector.