Date: /20 Day:MTWIAS

Name: BiJa) Arshad

Rea
Reg no: MS1 20 I12033
Papey: Financia S
Risk
Manage men
BBA gh
SubmidJed do:
S iTanveeY
Ahmad

Taachers Signat
 2
Date: 20
Day: MWTES

Ans
Jhis mode xna AloYJd
businesSeS KUD
hiqhJyu Com pediJve
enuiNonmend. ven
he minOY NaYadion.
Can OY Cau Jd Cause big
Tmpac on dhe businesS.
his is, why
businesSes
aXe abso Judle Ju Ke uLYed
be e\u Cuxiouk_ io
hexe appX0ach S0
do handle 6X
ace CA dbe eD onmen
Vayiadion
Such VaYiafon CouJo be
exderna OY indeynaJ,beYe
aXe difexend acdoxubich
Can efec) dhe demand
CLnd pxce pioducd.

hece axe he indey-aJia he

acdoYS INhich can atlecd
and pxice
ehdiduy pYO duc
Nayiqdion fo dhe piice o
madexiaJ
FeacherS Slgneture:
 3

D a y : T W I E S

Date:/_/20
Labouy CoS
Change
VaraGin n iodhe plices

CoveyDmen
O4 effecdiVeneSS o-
Cha nge in
dhe OpeyadToD
aY decsease indhe
nxease Jbe
be
Compedidoy p Xing0
duc. DYoduc._
SubsJidude pioduc.
6 dhe SeYvices
Change Jhe dechno Joqu
Chan e Used oY
Luhich
pYOducJion

yaYuion indhe pYCe o

USed in pYoducHionl
inpud. q Ael dene
p Yocec has
mpacd
OD dhe pYiCing
produc
he
he carc endidu
pXICe O inpud
4dh e
incYeaseS endidu wUJ
do erdheY incYease
have
SeJling piice educe
a dhe
he
p1oduc- Y
maYqin enjous
ptdfis Salid poducJ
On dhe eJesdkidy 0 demard
pICe
S J a es Jhad mcease in
p1Oduc
piice pYopoJiona) do
inu esJ Tea ivers S i g s t u r e .
Date 20 Day&TWIES
demand dhe pYOduc
heve GYe LncYease o
SeEn psfce Could
Shink dhe demand o
dhe pYOduc hich
CouJd YeSud i n JouNeY
pYO becque
demand.
Change in pxce o o pu
used by dh Com pedidos
aJSo have G0 m p a c
on_dhe demand an
endidy pYOduc wIJh
xeducdion in he
PYiceoY dhe inpud
Compe Joi WTJ be
poSid ion Se dheiy
pYoduc ad a OWev ptice
Compoyed ohe1S
dhad Wau Jhey
enloy highevey NOJume
mayKe SimiJayJy
Jhe pYice o pud
used by Compe iHoY TnCYeases
Jheye ina SeJing DXice
u be hdeass w bich
Can Cause clec Yease in Jhe
demand dhe pioduc

Accovdtog do dhe pielen

tduadhn AmYe i See MU
Teachers Signaturez
 Date: /20 Day:MTWIFS

pxoduces pioduds Jhad Deed aJad

O eneYq4
A'miet deel Mi JocaJynt
pioduced naduya gaf gnd doil|
pxoduceeJecdxici dheiy
Own pxoducadion puipoel. Houweve
beiy Com Pedido ue mpoyded ol
and gaopYoduce elecdncits -
pxo ducJ lon PuY pose
exeAmxeli sdeel MiJJ B exposed
0 Change in bodh olu ard gas
piice aS
Apy_changes i o and ga pice
GuNould Jead do change
nOhepiice 0- Ohepioducid
pToduced by Atsha sdeel MiJJ.|
An incseaseinJhe pxice odhe
oi WouJd audomadica JJy Jead
oan Ctease in dhe bioducdin
CoS dhein Compe JiJai uwhich
ulou Jo n YesuJJ Jo inctease
n he pstLe 0 he SeJJinq
lo dheDOduc. Such inCYea sell
in Aisha Sdee MisJhave
a DoSiaiNe aecd oD Amse J
Sdeel MiJO because as We
dis cus id in pievious payaga ph
had inCKease i'n piLelo
pYO duc: Would Jea d do dec ieafe
id demand S0 ou
Taar hars Signet
 b
Date_ 20 Day:MWIFS

Compedde1 have Jo deman d

becaute0 hiqbbigh price he
demand O Amye See
IMROJ pxoduc WOuld incease s
Jhad havepasiNe impac-l
Amxeli SHee MPIL
Gas s One o-heinpu)
Amxe Sdeel MiJ
dhexe
dhexe qD nCeasee
in dhe piLe 6-
ALJJ Jea d o inceake
ketn
Jhe pYice O- dheit producd
Which have DegadNe
Impacd on dhei oa1ke
vaume OY WJJ Xeduce he
DY-fabiu y 0 dhe endiiu
on'd ib Same Siduadton
pICe 0 Cas cdecteaseS
have pOsTve impa
OD dhe AmxeJi Sdee
MIJJ becauSe We Knaw dhad
educdion he DYCe
Oc ga Jead
do Jou CoS OD
pioducdton and because
Cos OD pioducian
dhe Se Jin pite
deceafe and wiJ
Inciease he Voume o
maY Ke Gnd pYo-dab lidu:

Teachers Signature:
Date_/20 Day:MTWTES

Q2
Ans
Coveted CaJJs and
P1Odecdive Puds
CaJ 9nd u opdions
Can b e USed o mon'age
isk o hoJdeys o he
Xisk. IwNo Comman
undeYJying
sdvaJeqies aYe do
YeduceeXposuYe USing a
CoveyedcaJ d(seJUingacall
o pdion OY do USe a UpYODece
pluld buying a pud 0Rdion).
COveYed
A Coveye0 Ca isa Ye adively
ConseYvadise SdNadeq4h
wbichdhe undev.JuingV assed
aSsed s
Ouned,and aCall Copdion on he
undey Jying is SoJa._he yalue
c he posidioo a Jhe
eypiadion 'O dhe Call
va ue o dhe
opdidn IS h e
undehDuing DJuSJhe value
he shod caJ .

Teachers Signature:
Date: _/20
Day: MTWIFS
NT - ST - max 10 ST -X
NTST ST4 X
VT ST-(ST-X-Xi(ST2X
Ihe
Cal pso4iddox
Can
dhe Covexed
be Com pu ded bu
Compaina dhe NaJue a
lexpiNadion. VTNdh dhe NaJue
S incepdiooV
dhe
WbereV.
inidia VaJue o he
undes Jying ess dhe call
plemiurm ShoYCauJ). So
Ca De Va: S. -
pXoPd dheve6te
oJousS:
hE Sr-mqx to, ST -
DSTSo tlo
X-SC
Sr LX.
nSr-S. -[ST -X }EC - X-Sat Co i(STX
Ma xipum
p1o-Gd-x-S.t
Maximum Jos.S Sa-C Ca
Bsea Keven: S S-C
So-Co
he Opdion pard
Coyetecd Cau (shoSdNadeqy
r- call)_of
oJadion MOuJd
xsky Seing Qppea1 yeL
aw oing a Calluidhoud
Jhe
dhe Sdock exposesS
exposes
foveso do
unJimided JosSes. ow
eve
SedJing a Coveed Call in
uhich Jhe SJock
Toachera Signature
Date /20
Day:MTWIES

IS OunedYeduces he
ovexaJJ XISK

Howeve SeJ Dihg a Cove Yeo

CaJ Keduce Yisk
aJSo hasdhe eddec.d o
imidin podendYaJ Qain
he call0opion et CouJd
miSs ou OD Qans
SdNong buD maxkeds bud
dhe Compen Sadion -oY qivinga
up dhe podendiaj
upside ains dhaddhe
pTemum in beaymay Ked
NIUJ Cushion dhe
On dhe undeJying
Ihe higheydhe exeYciSe pnce
O4 dhe Call Opdion he
Jess PYe miLum S
eceivec bud dhe Qseadey
dhe poden diaJ upSuidegan
Deteimining Ohe exeYcise
plice hal Ho acdoys
uduxeexpecda dions dhel
undeYJuing and de pends 00
dhe invecdo1 Sk
DieexenceS.
Padecde
Teacher9 Slgnature:
Date 20
Day:MTWIES

addBuying
C pud opdion do
undeying
povides on posiion
downsidle pYoJecion
whiDe SrS Keainho upSidel
padend tal. Ihe Na Jue ad he
expisadion 0 Jhe pldop ion
he NaUueo dhe
undeJuin DUuS
ong
he a lue

V STt maxiO,X-(2
VpSrt(X- Sp):X STLx
-ST SDx
lhe inidia.J JaJue O4 dhe
posidion dhe iniHia
plice Oo Jhe undexJuing
pJur dhe pxemium anJhe
hus, dhe plo-
peing dhe -Lxence
bedAedn VT and Va IS as

D: Sp max i0 X-ST?S, +pa)

D -X S tp.) X
n ST-(Stp) ST >x_
Maxinmum pse-id=
o
. Maxi mum StPX
.BeaKeven T
Teachers Signature:
Bate: 20 llag:0TWIES

A pS0decdionpud Can appea

b e be q sea diansacdian
WLdhno dhawbacks. ld is
odeniened a qCJassic
examp Je o oSuxance heYe
dhe pfe mim (S pai
Jo he nsußance SeJe
dhe pud WXIJer he hiahex
he exexciSe plCe he
eSs sk is assumed
dhe ho deY 0 dhe
unde ung and he moYe
KSk asumed bu he
SeJJexike dradhiona
foSuBance Coveiage s DYO Vided
aCekdain perioo o
o expitadiansdbel
dme Ade%
undesuing hoJdeY muS
decide Alhedhey o
beneA dhe inSuianCe Dy
puYchasing anadheY pud
apdion

ues dion:
LindexUuing asSed
psice d ad 8 200
and
pud op dion
Ali dh pfemiun 0
Ca1kiesa
o(p pliCe W had
exexcise
bxeaKeven_ o a
he Teachers Signature:
Date://20 Day:M WIES
psodecdive pud S.d1adequ?
ad expiiua he undexJn
aed is ISoST,whad
s dhe pXo-i geneiaded
dhe psodecdive
pud Sdiadeau
B Bieakeven- 190; Psoi
expiky=- B o

B,BseaKe ven-3210i p1o-

ad expiu$30
BteaKe ven $200 ploid
1lo
a d expiiy =

SoJudion:
he Costecanswey isA.
he bieakeven SSo-Pa
200-Zlo 2190 and Jhel
photd ad expity Ahen STE
ISoandx K
(ST ZX) is as oJJans:
X Sot p 10-
2003lo) - 30. Node
had in dhis nsdance Jbe
JosS OD dhe VaJue 0 dhe
undetuing aone ISo-2
00
-Sa Cushioned by Jhe
addidioD dhe piodecdian pud
Toachers Signatur.
 13
Date: /20 Day:MTWTES

MJhinkpinion Jhad mayKed

inCxeaSe bu o Some
exdend dhen Wouddie
do pXeleY CoVeYed call
S3adegau
SJvoadeg
As We Know dhad
WOYKS wel when
haye rildy
BuJIish meked and
hefedhe SiducJionis a so
JidIJe OX midJu
BuJUish.
o aeneva uau Can eaxD
anywhevel bedweeD and
5 Y moYe) SeJJinq
Covered CaN.Ho mush
you eaYn clepends On haw
No.JaIJe he Saock
mayke CUendJu SJhe
SJNike pYICe and he
eXpiiadioo dade
40 9enexa he moye
voJaile Jhe maike5 aYe
he highe Jhe mondlu
iDCOme uouy
NOm COveIed CaJ
dyading9 SXade.gu
Teachers Signaure:
Date: _20
Day MTWIES

xam pue o
oveved call
Hee's a Simple exampleO
COveYed Call Sdadecu. Youke
dectde d do DUichase Uo0
Shaxes ABC COD.o
00 pey shate:ou
beJieve dhald dhe sJock mauke
wiJJ expeYIenCe
Signiicand NaJadiJIs indhe
neaY udureYu aUso
DYedic-J dhad he shate pxice
ABC Cop. NIJJ
g NO do 1 ndhe
hex SIX
n Oxdle JoJockK_up uoUY
pro-ds yolu geJN1call
opdion Condac INIh he
Saike prce 1 o dhad
expne SiX manibs
hode dhad one Call
opdon Condac Congiss a
Shates).The piemium
OD Jhis ca opdiod s
3 peY Shate n
Jhe ConJtacJ

Teachers Signature
 S
IBate 20 Day:MTWIES

Scenatio Sdock price

lemains a 1oo pe
Shatte
n Sucb a Scenakion dhe buyeb
WIJJno execise dhe cg||
opdion because id isou-o
money (sJike ptice cxeeds
dhe masked ice. Since
dhe pYICe WJJ Yemain
uncha.anged uau NLJ no
ean aDu deduyn1om
dhe SJock. Ho wevex, Luol A
eaYn 3pe ShaYe om
dhe CaJ pe mu
Scena1io 2: Sdock ptice
inCYeass do 11o.
ScockpNKeincteases
do 110pepei Shaye ode1
Six mon dhs, dhe buue w
exeiciSe Jhe CauJJ opJonYou
LALJJ xeceive 0 pey shae
(siike pice 0 dhe opdion
and dhe 3 pei Sbale
dhe CaJ piemiuD. o
dht CovOsed Ca Scenayios
Teachers Signature:
 16

Date: /20 Day:MTWIES

you've Sacsi.tced a SmaJ

poi dion o podendia
p1oid in 1eduxn 01
sisk p10decdioo

Scenavio 3: SJock pice

decYeases do o .
In Such_a Case dhe c a J
apdion ALJ ex pite
Simi JaxJu. Scendiio 1. he
SHock AJJ DoSS 46 pei
Sha fe iDNaUue bu be
Cau piemium o 3 pe
Shaie wiD palJia.JJu a-se
dhe JoSS huls you -(f
JoSS INiJS be Pe
Sbaie

3
Ans
B As
ccoYds:
The Bafe Accotds se-esdo
Sed o-bankiog Supetvis fon
equ adians Sedby he
Base CommiJJee
Banking Supeivision BcBS).
Taschers Signaturos
 11
Date: 20 Day:TWTFS
hey wele deveJaped ovelN
Sevexa ueas bedween
1980 and 2011 úndei going
Seveta moditcadions NoveN
dhe yeais.
he Bace Acconds Wete
oimed Widh dhe goa a
Cxeading ndeinadiona
equadoiu amewotk -ox
mandg nq CYe did isk
Qnd maxke xis khei Key
uncdlon is Jo enSute
Jha ban ks
hod enough
Cash eS exves do mee Jhei
tnancia dbJigadion and
Sulsuivein ancia ond
economic disdxess hey aJSo
aim doSdleng dhen
CoXpotade qovey Datce
iSk manggenenN and
dianSp.qie ncy
The 1equJadions a1e Considexed
do be dhe ms Compiehensie
Se o YequJadlons
govexDi'n9 Jbe indelnadion aJ.
banKing Susdem. Ihe Base J
BaSeJIl and
Base 1
 18

Date_ 20 Day MTWIES

ase (and piocedute

Base aJSo Knoun as dbe
BaseCapida Accaidnas-ome d
1983.1 wal Cheaded
YeSpone Jhe 9 10Wing
DLUmbe Indelnadionla.
ban K and he nCeasing
ndegta.dion and inJetdepend lence
inancia maikeds.
RiequJadbs Ip_Seve 1a
Cound fe WeYe Conce 0ed
dhad inde1nadlonad Danks
NeYe nod Cayying enough
Cash KeSenes Sinde
indexna.diona inancia ma keds|
INeYe deepy indeYgyaded ad
dhad ime dhe
dne Uayge bank Coujd
COuse UcKisis in
mudip e COLndIMel.

Base Na enoNced bu Jaw

G oCoun dies ih1993
bud MOXe han
CoLn dies In DJen0ened be
Xequ ladions aipee love
Cusdomizaion. he equ Jaldions
ciméd do Im piove dhel
SAabiJi du o d h e nancio
Susem Seing
Teachers Signature
 19

Date 20 Day:MTUIES

minimu m YefeYve Yeu`emendS

oY in-JexnaJional banks

aJSo pYovided a
ame WOYK dalmanaging
CYedid KkdhioughV
Ahe iSk -Aeighding9
difeiend
do aasedN
ed
Acco ding
Base Ls
aeds

Wete
cJasifed indo-au
Cadegaes based
Kisk Weig hds
O-/ s k - e asseds
easuiu bands
Cash

20 - Joan o odheis
Secuxidieswidh
banks

he big.hes Cedid 1adihq.

Xesidendia maidaages.
So 1
Coipoxade debd
wIdh Signifcands
Bonks plesence ÁLeYe
indeinadiona
do had
Yeauited isk-Weig.hded 0
ase
dheit Ke sex Ve.
aS Cash

IndeynadionaJ ban ks Aeye

quided do aJJocade Capida

Teschers Signature:
Date: /20
Day:MTWTES
Jo Jowe1- xisk inyesdmends. Banks
Wete aJSo given inCendives
nvesding in Soveieign
debd andU
tesidendia
moi.dgage inpielexenceJo
Copo1ae debo.
Base J 1l(ptoceduye)
Base an exdensioo
Base Nas ndyoduced n
200 BaseJ incJuded
nen
KequJadJoty ddiJions
and ANOS
Cende1ed
axound imptoving dhiee
iSSes- oini murm
d CapidaJ YeauTse.mends
Supexvisoxu mechansns and
dNan Spayencu and
may Ke diacipJne.
Base Cteaded a mote
Compie bensive XISKnanagemen
ta mebY k. ord So by
C1eadin9
measutes
Sdandatdized
l0 Ce did
Opesadio nas Ond maxked
XISK. 3 Was mandaJoxu.
banks o Se
Jhese measuYes do
dedelmine dhei minicnum
Copida Keauitemends
Toschers Signahures
Date /20 Dayg:MTwTES

A Key Jirmida-Jion o-Basel

Alas dhad dhe minirnum
CapiJaJ eauiiemends Mese
deJeimined byJog King, ad
Ciedid isk onJy.1 DYovieda
patdiaJ sk managermend
Sus.dem as badh apeadiona
and maY ked sisks Wee

anosecd

Base 1L CeaJed 6dandaydized

measules d0 measuiing
Ape sa Jiona sisk.13 alsal
oCused On mayKe-NaJueS,
insJead o book NaJues Ahen
ad CNedij exposuie!
JooKing heldid ionaJJus 1
Sdrengdhened SupeliSodu
mec honisms and maykej
danspofe neuDy deveJaping
dis cJosu te UTea ueme 'nds
dO 0NeNsee NequJadisns
inqJJ, id ensuked Jhad
mai Ke paidicipands
obdained Deddey aCcess
inoma Jion.

ase p1oce duve

he CGJoba) inoncia CKiSIS
o- 200 exposedhe
weaKnes Ses o he
Teer hts Siu.a?rnit
Date L20
IDay:mTWIFS
indedoadio na J inancia Sys-dem
and Jed Jo heCYea-ion
Base I.be Base
Ke quJadions WeYe
Ceaded
2010 adex dhe Novembey
CSS; -inanciau
ue o hanevels ne
be
impJemende he
impJemenJadion ConsdandJ
been deJaued in ecend
Lueais and i eXpecded do
accuX in anuoty 2022
Base I1L idented dhe Keu
KeaSons Jhad CauSed
dhe nancig ISs. hey
incJude DOYCo poxade
Qove YDgnce and Jauid iJ
managemen.d OveY-Jeveled
Capidal SdxucduXes due da
Jack 0 e9uJaJoly
KesMicdions and misa liqned
inCendive iD Bae and .
Bose. SdNengdhened he
Minimum Capida eauitemends
aud.Jioed in Rase) and l1. Io
adolidion id indxoduced yaNiou
CapldaJ JeveNagean d
Uia uididu adio0
Keauiteme0.ds. Acokcing
egu.bacdions bh Basel l
Feachers Signature:
IBate 20 Day:MTWIES

banks Wete Teauiied do maindain

h e dodJowing inanciaj
Xadios
Tiex 1 Cqpidal Rado
eauiku Capidaly.u
Risk weighded Asseds
Levetage Kafio iex1 Capidal 3
Aver agelodalAsseds
Liaididy Coveyage Radio=
Lia uidAsseds=lod
on Todal oudlo1DS Ove nexd 30daus.
AJso Base J I1 inc.Juded ne
Capida KesetVe eauemends
and CoundeYCrCJitadmealunes
do OCNeaSe eseves in
peiiods 0 CYed expanSlao
on.djo Ke Jax
Keauitemehts duSing pevods
Keducecd Jendling. Undey
dhe DeA quideJiney banks
WeYe cadegadzed n
dieend qxoupk bagedon
hein Size and Ovexall
inpoxdance do he econamU
Latoe banks_WeY Subjecde Vd
do bigheY KeSeve
Keauive
Kemends due do heis
Teachers Signature
 a4
Date: /20
Day:MTWIF
9eade mpof ance
Jhe economu
he Bale Accoxd.s ate
exJemeJy npoydand o Jhe
unc toIning. oindernd dlonal
nancia may kes. lhe4 can
neyeX be ConsJan and
neecldo ConinuaurJu
be
up daded baced
prerend maxke d Candidiops and
Jeayned Yom he
pald.

Opinion and
Conc Jusio N:-
veiuRaseCoundYu Accoxd
ShouJdAoJJau
Se 9uJadion Yadhes dhanhei
OIn becauSe Batel Accovd
haveCyeaded ma tof dievences
do dhe Operadiono
inanciaJ Susdem.Banking
Sa-e he eaduxe
base AccoydSuchasS
hi gh eY s k CoNeyage
dus On JoSS-ab Soxbin
Capida in peviod o
Sdxesimptouing Jauidiy
SJandaxd UNeaon
Teachers Signature
 as
Date: 20 Day:M WTESS
Capida bu-flexs gaod
and DXevenido
e xeS buiJding O debj
duning boomJime has
heJped CYeaJing a
beJey banking Susdem
Senaben hel
Sdabilidy 0 IndenaionaJ
ban King Susdem. Sed up a
a anda Consis Jend
ndeinadio nal ban king SysDem.