Archive for December/2007

The following article was published in Financial Times on December 10, 2007 and written by Pablo Triana, Director of  the Centre for Advanced Finance at IE. If you wish to learn more about our finance related programs, please visit http://www.miaf.ie.edu/.

The recent debate on the Black-Scholes-Merton options pricing model continues to make waves. Research by veteran option traders and authors Nassim Taleb and Espen Haug claims that BSM was not really an original invention, that its real-world popularity has been greatly exaggerated, and that there may be no mathematical models behind option prices, with simple supply-demand interaction claiming authorship instead.
Such bold statements, while a welcome contribution to the search for truth, may deprive us of something that seemed valuable. BSM, for all its flaws, offered quantifiable light where before there was only unknown darkness. By “losing” BSM, we would lose such certainty, albeit misplaced.
The most obvious certainty that the model offered was a precise number for the value of an option. This it did in a quite ingenious way. Everyone would tell you that an option should cost money because it gives you the right to enjoy a potentially large pay-out while limiting the possible losses if things do not go your way. But who ensures that that right has value per se? That value is supposed to come from the probability assigned to the option expiring in-the-money. So who guarantees that the probability of making money on the option is non-zero? Who can honestly claim to know the exact distribution governing financial assets? Pricing options based simply on probabilistic assumptions sounds a bit fishy.

Read more…

On behalf of IE Business School, the Asia-Pacific Blog team wishes you a merry X-mas and a prosperous and an even more successful 2008.

Thank you for reading this blog and please keep on visting and posting comments on this blog!

Are you aware that some of the brands you see on a daily basis are acutally of Spanish origin? Most of these brands are also connected to IE:

• You will discuss about these brands or their owner’s company as some of the 300-500 cases you will see during your Master program at IE.
• Some professors are working or have worked in these companies and you get first hand experiences apart from the actual case study.
• Some companies are actively involved in IE activities such as Telefonica as co-sponsor of the Master in Telecom & Digital Business or Santander and BBVA (the two largest Spanish banks) as well as, again, Telefonica as co-sponsors of the Master in Marketing Management.

Just click the images and find out more about some of Spains most famous brands. Of course there are much more, however most of them you can see here have direct business relations with the Asia Pacific region.

This is a second interview to an IE graduate who participated in the IE Dual Degree with MIT. Roman Korchagin (Russia) finished his Dual Degree this summer is now back to Russia. Before his International MBA at IE, he worked for 10 years in distribution industry in business development and as Head of Sales. Roman went to study his Dual Degree with MIT in Cambridge.

Roman, why did you decide to do the Dual Degree with MIT?
I think that the Dual Degree gives an excellent mix of a general business education and a deep knowledge in one particular subject. My previous working experience was mostly in sales and I wanted to change my career and gain an expertise in another function. Thus the Dual Degree program was a good choice for me.
Although I didn’t have a direct experience in logistics before, I had a lot of interactions with a logistics department and participated in cross-functional logistics projects.
I was also attracted by the flexibility of the program and the MIT learning environment: in addition to the required courses I could take any courses from MIT Sloan School of Management or Harvard. When I came to MIT I learnt that most of the required courses are also thought to MIT Sloan students. And although the intake was only 33 students, we had an excellent opportunity to interact with MIT Sloan and Harvard Business School students, and PhDs from both MIT and Harvard.
The last reason was a chance to compare European and American cultures and the lifestyles.

How was your day-by-day at the program â?? similar to what you experienced at IE?
MIT and IE programs were similar and different at the same time. I can state that the quality of classes and teaching, especially if we compare the best professors, is equally strong at IE and MIT. I am grateful to IE for a solid base of business knowledge. From the other hand I experienced a great deal of flexibility at MIT. For example, I could try and drop many courses and was much more in charge of my learning path and workload.
I also did my first real research at MIT when I worked on my thesis project. That research was very practical since it was sponsored by a company (General Mills) and I worked in close cooperation with them and visited 3 times the headquarters.
I could also visit much more events, company presentations, and meetings with famous businessmen and politicians (Jack Welch, Steve Ballmer, Carly Fiorina, Edward Kennedy).
I can mention that students at the MIT program don’t represent such a big diversity of countries as at the IE program, but at MIT we also had a lot of PhD students taking the same courses and worked with them on projects, which was a very valuable experience.

How did you finance the additional year at MIT?
I received an International Logistics Fellowship from the MIT Center for Transportation and Logistics and covered the rest of my tuition and living expenses from personal savings.

What has been the main motivation to choose your MIT campus (Cambridge or Zaragoza)?
I decided to go to Cambridge because MIT could provide me with better learning experience: MLOG is a part of a huge university with hundreds of students from different departments and schools.

Thank you very much, Roman, for your enriching contribution to this blog!

 

On the February 8, 2008 IE will be celebrating the first IE Global Alumni Forum, a gathering of IE alumni to be held on the 8th of February 2008 in
Mexico City under the slogan â??Leadership Networkingâ??.

Throughout the event several conferences will be held featuring such renowned speakers as Emilio Azcárraga, President of Grupo Televisa the worldâ??s largest Spanish-speaking media conglomerate; Francisco Gil Díaz, President of Telefónica Móviles
Mexico; and Santiago Iñiguez de Onzoño, Dean of IE Business School. Furthermore the Forum is a unique opportunity for IE graduates to build there network among leading businesspeople and directors.

IE Global Alumni Forum – a gathering of IE alumni in Mexico
â??Leadership Networkingâ?

February 8th, 2008 from 9.00 to 19.00

The registration and speeches will take place between 08.30 and 14.45 a the:
FOUR SEASONS HOTEL
Paseo de la Reforma No. 500, 06600 México D.F.Luncheon will be served as part of the closing ceremony, from 14.45 at:
CLUB PISO 51 TORRE MAYOR
Av. Paseo de la Reforma # 505, Colonia Cuahtemmoc. 06500 México D.F.

Those alumni who travel to
Mexico for the event can take advantage of special discounted rates on travel and hotels. Several optional outings have also been arranged to take place throughout the weekend as a compliment to the Forum.

Do not miss out on this fantastic opportunity to reinforce your relationship with IE, to meet new people, and to expand your network of friends and professional contacts from within IEâ??s global community.

We look forward to seeing you there,

IE Alumni Association
C/ Alica 18, PB-1. Col. Lomas
CP 11040. México D.F., México
Direct tel.: +52 55 5540 1180. Ext. 101
Main tel.: +52 55 2623 0410 / 11
Fax: +52 55 2623 0410 ext. 106
iealumniglobalforum@ie.edu

IE offers you a lot of open doors to explore this innovative institution. The immediate and most evident is, without any doubts, the IE home page www.ie.edu where you can find all relevant information on our programs and activities. Quickly you will notice the we’re are much more than just a “top-ranked MBA school”, especially when you navigate the different research fields and the latest IE events happening on campus or around the world.

However, you really should not miss to have a look on the more than 30 blogs which are written by professors, members and alumni of IE. Certainly, the most recognized blog is the BizDeans Talk. This blog is written by our Dean Santiago Iniguez together with Paul Danos from Tuck Business School and Della Bradshaw from FT dealing with the latest trends in the business education environment. One of the most visited as well as commented blogs in Spain and in the Spanish speaking IT community the blog from Enrique Dans. This blog is a must for each IT curious who manages the Spanish language since it combines in a very entertaining way things of the daily IT life with the latest reasearch findings.

Apart from these individual blogs you will find our functional, geographic and industry focused blogs which are jointly edited by professors and alumni. The aim is to discuss area relevant topics mixed up with the academic backing of our faculty.

As you can see, in the ieBlogsphere you will gain new perspectives on IE and as being blogs, of course, you’re invited to participate with your comments. So, start here to step deeper into the IE world.

Please find as follows a short interview with Peyton Bowman (USA). Peyton will finish this December his International MBA at IE and started already in September his Master in Engineering in Logistics & Supply Chain Management in Zaragoza as part of the Dual Degree agreement with MIT.

Peyton holds a BA degree in Civil Engineering from the University of Arkansas. After working in Europe and New Zealand and traveled in Latin America and South East Asia, Peyton started his International MBA at IE. His thesis at MIT-Zaragoza is to develop ‘Energy Efficient Logistics Parks’ for the purpose of cutting CO2 emissions by using renewable energy, special warehouse design and materials and others, all in part of foresight of carbon trading and carbon taxation, a very important topic nowadays, indeed.

Peyton, why did you decide to do the Dual Degree with MIT?
After gaining a BS in Civil Engineering and a MBA at IE, I wanted to specialize in a field that would utilize knowledge I had gained from both fields. This MIT program was a perfect fit in combining both quantitative and qualitative skills from arguably the worldâ??s best engineering program.

2. How was/is your day-by-day at the program â?? similar to what you experienced at IE?
Day-by-day life here at ZLOG in Zaragoza is quite different from IE life in Madrid. Instead of ~6 hours in class per day, we have typically 3 hours of class and the rest of the day for assignments, reading and at times (very little) enjoying what the Spanish culture has to offer. With 25 students compared to 240, there is one-on-one interaction with faculty in and out of the ZLC centre. The atmosphere is similar to a large family.

3. How did you financed the additional year at MIT?
Not my favourite subject, however I have taken private student loans from the US. ZLOG has loan schemes with several Spanish banks with reasonable payback period and interest, with a logical deferral period. I believe almost anyone is eligible for these loans if admitted to the ZLOG program.

4. What has been the main motivation to choose your MIT campus (Cambridge or Zaragoza)?
Being from the US, I wanted to continue my experience in Spain after the IE program. The Spanish language is highly important in the US when I return one day… Continuing in Zaragoza is in essence killing two birds with one stone. Zaragoza is a nice town of 800,000 inhabitants and a calm place to study with sufficient activities for entertainment. Being from the US I feel the door is always open to return. The degree in Zaragoza still gives me flexibility to stay in Europe much easier if I decide to in the future. Furthermore, the cost of the program in Zaragoza is significantly less (however with the current state of the US dollar, prices may not be much of a deterrant).

12月4日China Economic Review发表了题为FT puts IE Business School at No. 5 in Europe 的文章。
值得一提的是，文章强调IE商学院虽然发源于西班牙，但却是一所非常国际化的商学院，教学机制和运作与北美商学院类似。作为IE的校友，对这位老记第一次这么大声地在中国媒体为在西班牙的IIE挣“international”的名份，惊喜之情难以言表。
以下是全文，以飨诸君。
IE Business School (the IE stands for Instituto de Empresa showing its Spanish origin but it is very much a Business School in the American tradition) is ranked No. 5 in Europe and No. 1 in Spain in the latest ranking of European business schools carried out by the Financial Times.
The annual report is based on the average results obtained by top European business schools in the rankings published throughout the year by the Financial Times that cover MBA, executive MBA, masters in management and executive education programs.
FT surveys encompass factors that include the degree of internationalisation of the business schools and the outreach of their programs; the professional advancement of its students and the salaries they command; the degree of diversity among the student body and faculty; and the extent to which the students’ and recruiters’ expectations are met.
The results of the latest FT ranking serve to consolidate the position that IE has obtained in international rankings throughout 2007: Forbes placed IE 4th in the world; The Economist ranked IE 9th in the world; and the recently published Aspen Institute, which measures the impact of corporate responsibility on business schools, placed IE first in Europe and 10th worldwide.

In todayâ??s business environment, companies must produce innovative products at a low cost and effectively deliver them to customers around the world. Globalization has driven supply chain management and logistics to the forefront of business strategy and created the need for a new kind of business leader.
In recognition of this development, IE Business School has partnered with the MIT Center for Transportation and Logistics in Cambridge, Massachusetts and the MIT- Zaragoza Logistics Center in Spain to run already since last year a dual master’s degree offering the opportunity to earn both an International MBA at IE Business School and one of the following specialized degrees:

• Master of Engineering in Logistics at the MIT Center for Transportation and Logistics in Cambridge, Massachusetts.
• Master of Engineering in Logistics & Supply Chain Management at the Zaragoza Logistics Center in Zaragoza, Spain.

This dual degree program, lasting 19 months, prepares students for careers that combine general management capabilities with specialized logistics and supply chain management skills for students seeking management responsibility in manufacturing, distribution, retail, transportation, consulting, software and/or logistics organizations with a system-wide perspective.

The dual degree structure enables the credits received in the MLOG or ZLOG program to count for the last period of the IE International MBA program. The programs are completed sequentially over a 19 month period, with a short break in August.

To gain a better perspective on which benefits this dual degree provides, please read to upcoming posts about this topic.

Ang Lee’s new film, an espionage thriller set in WWII-era Shanghai. Tony Leung stars as Mr. Yee, a powerful political figure in 1940s Shanghai. Tang Wei, makes her feature film debut as Wang Jiazhi, a young woman who gets swept up in a dangerous game of emotional intrigue with Mr. Yee.
看了一些对李安新作《色·戒》的访谈，除了对那些老拿几段性爱描写说事的炒作苦笑外，到还是有几分惊喜。第一，终于有很多很多人要跟广播电视总局闹“分级制”了；第二，导演的观点－－“情感超越理智彰显了人性”－－尤其在这部影片中对“女人对一个不该爱的男人的情欲”超越了“爱国主义”的充满同情和近乎唯美的演绎，居然在国内媒体上得到很大的声援。还不知道马德里什么时候播，但是一定回去看正版，呵呵。