FIN 405 Discussion questions
3.1 Learning Outcomes:
• Explain the role of arbitrage in option pricing, including minimum value, maximum
value, value at expiration, and lower bound.
• Identify the factors that affect an option’s price.
• Explain the difference between American and European options.
• Describe put-call parity.
3.2 Action Required:
Read the following to prepare for this week:
•
Chapter 3
Videos
Watch the short video at the following link:
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• https://www.youtube.com/embed/I0Xa5wlmM_A?rel=0
3.3 Test your Knowledge (Question):
Q. Discuss the factors that affect an option’s price?
3.4 Instructions
•
•
Post your answer on the discussion board using the discussion link below
(Week3:Interactive learning Discussion)
your answer needs not to exceed 100 words.
MGT 301 section
This activity is important because as a manager, you should understand the factors that affect a
firm’s profitability and long-term survival. According to the resource-based view, a company can
gain competitive advantage from resources that are inimitable and rare.
The goal of this exercise is to demonstrate your understanding of the resource-based view by
writing a conclusion in your words after reading a case study.
Case Analysis (The Resource-Based View in Sports)
Strategy and sports met in the movie Moneyball. The Oakland Athletics applied statistical
analysis to the evaluation of players and surged in performance. The team’s analysis method,
called sabermatics, was unique in how it applied objective data to predict future player
performance. The Athletics were able to recruit players at a lower cost due to their proprietary
knowledge. Even after competitors started using statistical analysis, the Athletics benefited from
their early knowledge, capable staff, and history of decision making. All of this, of course,
translated into profit for the team owners.
Competitive advantage comes from unlikely places in other sports as well. Researchers found
that NCAA football programs benefit from staff diversity. Racial diversity among coaches and
varied past experiences predict success. NBA basketball teams are more successful as they gain
shared experiences. After years together on a team, just like after years together in a workplace,
players/coworkers have a shared understanding of how work is done.
Financial resources are of huge benefit to the few universities with successful sports programs.
Paying top coaches, building impressive athletic facilities, and fan support, all contribute to
intangible gains such as reputation, stronger shared feelings of winning history, and motivation.
But what happens with a team suddenly loses its competitive advantages? In 1986, Southern
Methodist University in Dallas, Texas, was dealt what is called the “death penalty” in college
sports. After years of paying players and their families, among other serious violations of NCAA
rules, the team was punished with the cancelling its entire 1987 season. This damaged recruiting
efforts, fundraising, reputation, and shared experiences among staff and coaches to that point. It
was 20 years before SMU was in another bowl game.
2.3 Test your knowledge:(Question)
Read the case about the resource-based view in sports and write the conclusion of this case in
your words. Create a discussion board thread and upload your answers. (Min words
recommended 100-150)
2.4 Instructions:
Read the case about The Resource-Based View in Sports & demonstrate your understanding.

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