University Degree: Finance
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In the present project an attempt is made to study the importance of fundamental analysis for investors. SHARES: - The companies Act 1956 defines Shares as "a share in the capital of a company and includes stock except where distinction between stock and share is expressed or implied. A share is regarded as property, which can be bought and sold like any other property. It also consists of other rights given by Articles of Association of company. EQUITY OR ORDINARY SHARES: - These are those shares, which do not enjoy any special rights in respect of payment of dividend or repayment of capital.
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Capital Markets & Investments. This reports main aim is to experiment my knowledge upon the stock market as well as assessing the results of my investment portfolio. For this project I have been given theoretically 100,000 to invest
Other global markets were hammered uniformly. Now arguably, a single-digit slide in what is, after all, an emerging market which few foreign investors have direct access to, should not be important enough to knock the US market for six. So are investors just jittery and looking for any excuse to take profits - or is this the start of something bigger?1 I decided to think it wasn't the start of anything bigger and therefore started investing in my five selected companies.
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Why did the EU introduced a phased approach to adopt a single currency ? Why did some countries refuse to join the EMU ?
The entire process ranges from the preparation for entry to the institution of Exchange Rate Mechanism (ERM) to ensure all candidates' legislations and monetary issues compatible with the EU monetary regime (Vladimir Lavrac 2003). Candidate countries must follow the desgined procedures during their negotiation with the EU and might choose whether to participate or not. Despite the fact of having great potential in competitiveness in the world monetary, EU still has been unsuccessful in inciting some European countries to join the Euro area. This paper will focus on the introduction and reason behind the use of three-phased approach by EU as well as factors affect the determination of countries to use Euro in lieu of their original currency.
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Currency_Wars. we define currency wars as monetary and exchange rate policies designed by a country to lower the value of its currency.
Of course this might be viewed differently (as a bad or good decision) according to the theory of 'liquidity trap' (whereby reducing the funds rate by the Fad is viewed by some people as having no problem in the future while others say it does have risk but suggest the central bank needs to push the real interest rate below zero to decrease the nominal interest rate towards zero, thus moderating the inflation rate which ultimately helps in getting out of the liquidity trap).
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Banking and International Banking Systems Basel II. In this paper we will outline the basis for the establishment of the Basel Committee and its long strived objectives to play a supervisory role for the banking industry.
After the recession of 1970s and a series of smaller crashes came the collapse of Herstatt Bank due to settlement risk issues it was decided in 1974 to establish the Basel Committee on Banking Supervision (BCBS) under the auspices of Banking International Settlement (BIS) with its headquarters in Switzerland which was seen as a move by the central-bank governors of ten counties to "...extend regulatory coverage, promote adequate banking supervision, and ensure that no foreign banking establishment can escape supervision" (BIS, 2009).
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Taxation. From a tax point of view, the OECD recommends the so called Arms Length Principle when dealing with transfer price aspects,
Multinational companies use transfer prices for sales and other transfers of goods and services within their corporate group. To understand this concept better, the OECD considers two corporations to be related when one of them participates directly or indirectly in the administration, control or capital of the other; or if same persons participate directly or indirectly in the administration, control or capital of both corporations. 2 1.3 Uses The economic reason for which transfer prices are charged, is to be able to evaluate the performance of entities that belong to a group.
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Weak-form EMH suggests that current security prices are fully reflect all information contained in the past history of security prices such as the history of past prices, trading volume or short interest and the information is not fully reflect the prices of security immediately, Therefore; it would allow an investor can earn excess returns (compare a passive buy-and-hold strategy) from using active trading rules based on historical prices. 2) Semi-strong EMH states that security prices are fully reflect all publicly available information about the stocks market.
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We have used the WACC method to determine the value APN News & Media (APN) by discounting future unlevered cash flows to the present value with the WACC,
We have taken the risk free rate on 11 January 2011, for our calculation which is at 5.33% (RBA). RM is the return on the S&P/ASX 200 Index. For our calculations, a market risk premium (RM-Rf) of 8% is used which is commonly used as a standard figure in CAPM calculations. The beta of APN is determined by using regression analysis (refer to Appendix A: Regression analysis APN) and uses the continuously compounded returns of APN and the S&P/ASX 200 Index for a period of 5 years using monthly data.
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Capital market practice questions. Question 1: Explain how STIR futures can be used to hedge the interest rate reset risk in the FRNs.
amount underlying the future - NV01 = Nominal Value of a Basis Point - PV01 = Price Value of a Basis Point As scenario, the company has issued £250,000,000 of Floating Rate Notes (FRNs) paying LIBOR plus 40 basis points. This FRN has three years to maturity and pays semi-annual coupons. A coupon is payable today, the next coupon has been set and is payable in 6 month time. Therefore: - FVCP = £250,000,000 - NVFT = £500,000 - NV01 of £500,000 six month deposit is £500,000 * [0.0001 * (180/360)] = £25 - PV01 of future is £12.5 The
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Hedge funds strategy. This assignment will analyse two hedge fund strategies namely Opportunistic and Macro to make comparison with a benchmark buy-and-hold approach by making a comparison of the historic returns
II. BODY Generally, hedge fund refers to a private investment method for wealthy individuals or institutional investors. The perspective of "Hedge Fund" definition is very variety. The Columbia Investment Management Association (2007) argues that a hedge fund is a fund which can have both short and long positions, use arbitrage, buy and sell underestimated bonds, securities or trade options, and make investments in any chance in any markets where it predicts telling benefit at decreased risk. Another viewpoint which has been claimed by the Australia Alternative Investment Management Association is that the definition of "Hedge Fund" has come to combine any absolute return fund investing in the financial markets such as stocks, bonds, currencies, commodities, derivatives, etc; and/or using non-traditional portfolio management techniques including, but not limited to, shorting, arbitrage, swaps, leveraging etc (AIMA, 2009)2.
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Groupon Investment Appraisal- one can raise a few doubts over Groupons business model and their current strategic position.
Despite these strengths, one can raise a few doubts over Groupon's business model and their current strategic position. The company operates in a very volatile market. Low capital requirement and no intellectual property rights restriction make it easy to enter the market, which leads to an increased number of competitors (Porter, 1980). These numerous competitors imply little brand loyalty and no customer lock in.
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Until now, we are still suffering the credit crunch. So we must wonder how credit market contributes to the credit crisis. And how did problems that first manifested in a relatively small part of the mortgage market lead to a contagion affecting other types of credit including credit cards, student loans, and others, and then quickly spread to threaten the liquidity and possible solvency of many financial institutions around the world? It is truly a complicated problem, but there are still something we can find to discover the relationship between credit market and the credit crunch.
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In 1965 Eugene Fama published his dissertation arguing for the random walk hypothesis. And then in 1970, Fama do several studies to prove the idea that could not reject the significant power of this theory. Jensen (1978) also believes that "There is no other theory with as much economical background as the Efficient Market hypothesis". Some studies depicts the market as an intelligent agent with an invisible hand (similar to the concept of Adam Smith) that is able to correct the speculative movements in price processes as described in Poterba and Summers (1988).
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The Revolution of E-Commerce and Café Bookstores Borders Group at their highest point of success operated in US, UK, Australia, New Zealand, Puerto Rico and Singapore as they forecasted prior to their IPO change in 1995. Through its subsidiaries, Borders, Walden Book Company, Borders UK and Borders Australia were able to boost its revenue through it vast growth in store chains (Datamonitor 1). In the competitive retail book business, Borders began to face competition from mass retailers and large e-commerce based book companies.
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Merck Pharmaceuticals Analysis. Merck is a healthy company to invest in with a diverse portfolio since their merger with Schering-Plough in 2007. Before investing however, there are a few things to consider.
According to Kesic, by "alliancing they tend to create strategic synergies in an endeavor to be successful, competitive and capable to continue with further development circles (1). Merck has been a major competitor in the vaccine market but have historically struggled with generic erosion despite blockbuster product launches (Data Monitor, Merck & Co., Inc. 6). Schering's relatively safe product portfolio secures sales growth which leverages Merck's weak late-pipeline. Merck's internal stakeholders include its 100,000 employees, management, and investors. Employees and applicable unions are vested in stability and profitability of employers.
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In this paper, we demonstrate the use of actual financial data for financial ratio analysis of Timberland.
APPAREL AND ACCESSORIES Timberland(R) adult apparel products consist primarily of rugged outerwear, sweaters, shirts, pants and shorts for men. These products feature, in certain models, premium waterproof leathers, waterproof and water resistant fabric, rust-proof hardware, canvas, denim, high-quality specialty cotton, wool and other quality performance materials. Timberland(R) boys' apparel products are INDUSTRY The Company operates in an industry which includes the designing, engineering, marketing and distribution of footwear and apparel and accessories products for men, women and children. The Company has five revenue generating business units with separate management teams and financial reporting accountability.
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It can be seen that these figures to show that for the financial year 2009, an investor would have had to invest £8 in order to gain a dividend return of £1, while in 2010 the figure was lower at 7.87. This means that shares in Debenham's were less attractive to investors in 2010 than in 2009. Figure 1: Debenhams PLC share price from 2009 to 2011 Source: FT, 2011a FTSE 100 Index As the same period as Debenham's financial year for 2009 and 2010, the average index of FTSE 100 was 4422 in FY2009 while it increased by 28 percent to 5669 in FY2010 (London Stock Exchange, 2011).
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The aim of this project is to predict the weekly exchange rate of Hong Kong dollar to Chinese Yuan using autoregressive integrated moving average (ARIMA) models.
So that one general assumption is made that the historical data incorporate all those behavior. As a result, the historical data is the major player in the prediction process. Aim of this case study is to provide a practical and accessible example of Box and Jenkins'Auto-Regressive Integrated Moving Average (ARIMA) model. ARIMA technique has been widely used for time series forecasting in the past two decades. The exchange rate between the Hong Kong dollar and the Chinese Yuan (HKD/CHY) has been used for me to develop this case. The historical and up-to-date exchange rate data I used in this report are available freely to download from international and national agencies.
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Nova Chemicals received an unsolicited offer of $160.0 million for the Industrial Products Division (IPD) from United Chemicals. The purpose of this memo is to evaluate the offer, and consider the implications of the sale or retention of IPD on the 5-year
From a financial perspective, the sale of IPD should be based on whether the selling price is at least equal to the value of IPD. Our valuation of IPD suggests a value of $185 million, with a valuation range of $164 million to $208 million (see Exhibit 1). We determined this range based on (1) a range of risk premia over the market rate of return (from 5.5% to 6.5%) when determining out cost of capital, and (2) a range of long-term growth rates for IPD.
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Overview of the pperformance of the Palestinian Economy and analysis of the Palestinian and Jordanian Banking Sector.
Though 2007figures released by Palestinian Central Bureau of Statistics May ,2008 , it appears that growth resumed in the second half of 2007 concurrent with the improved security situation and despite the closure of Gaza, GDP in 2007 was USD 4,135.8 million and it is expected to be higher in 2007 than 2008. However, it will still be around 15 percent below its peak in 1999. The economically and politically unstable environment that has been characterizing WBG for these last years, explains the very modest role of the financial sector as a whole.
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changes in capital market assumptions, or (3) the appearance of a new asset class in the market. The 1997 introduction of TIPS in the US market seemed to satisfy both conditions 2 and 3, as described next. Treasury Inflation-Protected Securities (TIPS) TIPS are inflation indexed bonds issued by the US treasury. While such bonds had been issued before 1990 in other countries (Exhibit 2), they made their first appearance in the US in 1997. They are designed to approximate real bonds with payouts that are constant despite inflation surprises.
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Taking Disneys 100-year Sleeping Beauty Bond issue as a motivating example, we aim to analyze whether such century bonds are merely a novelty item or an indicator of a long term trend in investment management.
The biggest advantage of 100-year bonds is their tremendous convexity. As shown in Exhibit 2, Sleeping Beauty has a much larger convexity than Napping Beauty, which is identical to it except for a shorter maturity. That is to say, the relative rise in price of Sleeping Beauty compared with Napping Beauty given a downside shock in interest rates is significantly higher than the relative fall in Sleeping Beauty's price when interest rates rise by the same amount. Generally speaking, a 100-year bond will significantly outperform a 10-year bond with the same coupon rate when yields fall, while it will underperform a 10-year bond to a much lesser extent if yields rise by the same amount.
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2 a. Financing requirements Debt repayments Capital expenditures Working capital b. risks associated with polaroid's business and strategy Business risks - Business risk refers to the degree to which the company lacks the capability to manufacture and sell a product to present or new markets. It also includes the question of whether there is sufficient customer demand for the product under consideration. Competitive risks - Competitive risk refers to whether the present competition will retaliate against any moves being made or contemplated by the company and, equally important, the likely intensity of this retaliation.
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The second approach is based on the price-to-earnings ratio of the company and its reciprocal, the earnings yield. The expected total return on stocks (%) is estimated to be the earnings yield. However, the two approaches produce highly different results and Jamil Baz is in the tough situation of deciding whether or not he should emphasize one of these approaches during the client meeting or, otherwise, explain the apparent differences between their results. Analysis Model Details and Assumptions The Gordon Growth Model uses the current average dividend payout ratio of the entire stock market as a starting point to calculate the ERP.
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MSDI_Case_Solution. Compute the net present value of the photoelectric inspection equipment in (a) pesetas, by discounting peseta cash flows at a peseta discount rate; and b) dollars, by translating future peseta cash flows into dollars at expected future
pesetas, by discounting peseta cash flows at a peseta discount rate; and b) dollars, by translating future peseta cash flows into dollars at expected future spot exchange rates. Merck's dollar hurdle rate for a project of this type was 13 percent. Assume that at the time of the analysis, annual inflation was expected to be 8 percent in Spain and 4 percent in the United States. Answer: The attached excel has the calculations pertaining to the NPV of the new machine. In the first alternative, we find out the WACC of the company in Spain by using the following formula: WACCMERCK-SPAIN =[(1+ WACCUSA )* (1+ INFLATION RATESPAIN )/ (1+ INFLATION RATEUSA )]-1 Then using this as the hurdle rate, we discount the cash flows to find the NPV in pesetas.
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