A framework for valuing derivative securities

This paper develops a general framework for valuing a wide range of derivative securities. Rather than focusing on the stochastic process of the underlying security and developing an instantaneously-riskless hedge portfolio, we focus on the terminal distribution of the underlying security. This enables the derivative security to be valued as the weighted sum of a number of component pieces. The component pieces are simply the different payoffs that the security generates in different states of the world, and they are weighted by the probability of the particular state of the world occurring. A full set of derivations is provided. To illustrate its use, the valuation framework is applied to plain-vanilla call and put options, as well as a range of derivatives including caps, floors, collars, supershares, and digital options.

The Napster decision : implications for copyright law in the digital age

Challenges posed to copyright law in the digital age is most evident in A and M Records Inc v Napster Inc - the various court rulings indicate that Napster is likely to be held responsible for massive copyright infringement should the case come to a full trial - implications for Australian copyright law, the recording industry and individual artists - globalisation may hinder the ability of the recording industry to prevent mass copyright infringement.