Career Choices and Factors Influencing Those Choices Case Study

This case study involves education and career decision. The case study is going to highlight individuals career choices, factors influencing those choices and long life impacts of these choices.

Finance

There are several aspects to consider while making a decision on what career you would like to pursue.

• Personal interest includes what you like doing and how far you would go to get it. A good example is when someone is in love. One is certain they are right about their career choice when they end up engaging themselves in doing what they truly have a passion for.
• Amplitude is where you go beyond interest to do something that you have a potential and you are good at. For example, childhood dreams of becoming a doctor. With such ambitions one should be willing to invest in education to attain the necessary qualifications of becoming a doctor.
• Your personal significance is not right when someone keeps on moving from one job to another simply because they don’t feel comfortable with their choices. This is when you check what really matters to you.
• Employment and job opportunities – most parents, guardians and sponsors advise scholars to go for careers that fetch more money. This should not be the case, an individual is supposed to involve him/herself in a career path that they have interest in, work hard and earn as much as they can (Hull, 39).

A real option identification

A real example of real option is of someone who would want to be a lawyer but at the same time wants to be a doctor. This is a hard decision to make because in both cases the courses take a long period to study. The person may end up losing all their chances not only because they want both careers to pursue but because of the dilemma he/she is in, which is an obstacle for making a wise choice.

Option real models

The other options that this person has is to become a medical lawyer which was not his passion and which he was never qualified for. In a circumstance like this individual ends up paying more and relocating to other learning institutions.

This three dimensional tree for Sx and S2 involves assumptions correlations and adjusting the probabilities of each node that reflect the risk of career choice and the risk of expansion of companies.

In the occurrence of probabilities to reflect the risk of career choice over the risk of expansion.

There are several underlying risks that will be clear once he or she makes his or her choice:

• If he/she chooses to go after his/her career it might affect his/her relationship with the spouse
• It will also mean that he/she has not only abandoned his/her dreams’ but also has to start a new life (Hull, 66).

Since this person decides to be a lawyer, it means that he or she has forsaken all his/her former goals and dreams. Our case character is volatile since he/she chooses to move ahead. He/she also chooses to be near his spouse, who will be studying at the same school. In this decision, there is the show of maturity since he/she does not choose according to his/her own interest but broadened his/her mind to see possibilities in his/her current choice.

He/she shows a strong character in making independent choices

Sensitivity Analysis

In a companies growth risks are taken all the time while planning major expansions and hiring new staffs. Funding this expansion and the new ventures and challenges, one has to be well planned out and ready to face the challenges that will arise during the expansion.

In his/her binomial expansion a move puts them at risk of loosing more than he is targeting to reap because the bank is going to grant them a loan. This does not guarantee them in success.

Interpellations of findings

The other pricing models that they might use in taking this risk are:

• Multi-step binomial mode – this is a credit risk measurements and management important in current issues in the modern finance world. There are two major schools of thought for credit risk analysis namely the structural model based on the asset value and the intensely based reduced form of modeling (Hull, 89). The most popular risk model used in practice is the binomial expansion technique.
• Trinomial model – this is an option pricing model incorporating three possible values within one time period; it is assumed that the value of the underlined asset will be greater or lesser than its current value. This model, on the other hand, incorporates a third possible value which incorporates no change of value over time period.
• Stochalistic volatility model.
• Jump diffusion model.

After taking this expansion step he found out that the risk was worth taking. He had a preset goal to expand. Risk taking often means standing a chance to lose or be involved in undesired accidents.

This table will help you understand how it is approached by the use of a least square analysis to know how the expansion risk between the continuing value and the relevant values from relevant variables.

The free risk is 6 percent yearly (Hull, 102). The current expansion purchase is 1.00 and the price for strike is 1.10. Let us look at the money of two years, the investor option must decide whether to execute or not. From the assumption of this path we see:

V=a+BS+cs2

Whereby S is the purchase price for two years and the continuing value is V, discounting is back to two years. The five observations on S are: 1.07, 1.08, 0.97, 0.77 and 0.84. The values corresponding for V are: 0.00e-006*1, 0.18e-06*1, 0.20-006*1, and 0.09e-006*1. Through this calculations the values of a, b, and c are minimized.

∑5/i=1(vi-a-bsi-cs2)2

Conclusion

There are several findings in this case study:

1. A well thought risk must have supportive factors influencing its move.
2. One must expect either profits or losses of any new venture
3. One must invest in logistics, marketing structural adjustments while taking this sort of risk.
4. Market research is very vital when it comes to taking this kind of steps.
5. This also shows us that not every move in business should be avoided due to the nature of its risk since it could be the step that would the business to the next level.

Works Cited

Hull, John. Fundamentals of Futures and Options Markets. 7th ed. Boston: Prentice Hall, 2011. Print.