Archive for February, 2013

Growth, Stability and Sustainability

Crisis and Conflicts by Ethiopis Tafara Director, Office of International Affairs U.S. Securities and Exchange Commission International Centre for Financial Regulation Third Annual International Regulatory Summit Regulation and Policy Priorities: Growth, Stability and Sustainability 25-26 September, 2012 Thank you, Barbara (Ridpath), and thanks to the International Center for Financial Regulation for inviting me here today.  […]

Forex Managed Accounts

Prolific Mini Forex Managed Accounts at Aplari-US

Mini Forex Managed Accounts Prolific Mini-forex Managed Accounts are usually opened by Investors whose risk capital is below USD$25,000.00.. The amount of an account’s net assets committed to margin in this Program will vary as a result of market volatility, among other reasons. On average, three percent (3%) to forty percent (40%) of net assets […]

Var

VALUE AT RISK (VAR)

What is the most I can lose on this investment? This is a question that almost every investor who has invested or is considering investing in a risky asset asks at some point in time. Value at Risk tries to provide an answer, at least within a reasonable bound. In fact, it is misleading to […]

To Hedge or Not to Hedge?

Investors and businesses have more options and opportunities than ever before for hedging risk. But should firms hedge risk? What is the payoff to doing so? If a business or investor chooses to hedge risk, what is the best way to hedge risk (derivatives or insurance, for instance)? Hedging Let us assume  that we have […]

Bond valuation and bond yields

Bonds and their variants such as loan notes, debentures and loan stock, are IOUs issued by governments and corporations as a means of raising finance. They are often referred to as fixed income or fixed interest securities, to distinguish them from equities, in that they often (but not always) make known returns for the investors […]

Black, Scholes and Merton(BSM) Model

Black and Scholes first published their famous model in 1971. However, Robert Merton was a key member of the research team, and it is now becoming accepted that the model was their combined work. THE VALUATION VARIABLES Black, Scholes and Merton taught us that the premium on a call or put option is defined by […]

RISK MANAGEMENT: PROFILING AND HEDGING

 To manage risk, you first have to understand the risks that you are exposed to. This  process  of  developing  a  risk  profile  thus requires  an  examination  of  both  the immediate risks from  competition  and  product  market  changes as well  as the more indirect effects of macro economic forces. We will begin this post by looking […]

Financing Innovations and Capital Structure Choices by Aswath Damodaran

  The last two decades have seen a stream of innovation in financial markets, especially in the corporate bond arena. Some of these innovations were designed to give firms more flexibility in designing cash flows on borrowings, allowing them to match up cash flows on financing more closely to cash flows on assets, thus increasing […]

Measuring Company Exposure to Country Risk: Theory and Practice – Part 1

The growth of financial markets in Asia and Latin America and the allure of globalization has made the analysis and assessment of country risk a critical component of valuation in recent years. In this paper, we consider two issues. The first is the whether country risk should be considered explicitly in valuation, and if the […]