Financial Markets Essay Examples - Free Research Paper Topics on StudyDriver.com

Three Propositions of the Arbitrage Pricing Theory Finance Essay

Arbitrage opportunity arises if an investor can construct a zero investment portfolio with a zero profit, in other words, ability to make profit without any risk. Arbitrage Pricing Theory based on three main propositions. First, Security returns can be described by a factor model. Second, idiosyncratic risk can be diversified away. Third, Arbitrage opportunities are eventually diversified away. A “This theory predicts a relationship between the returns of aA portfolio and the returns of a single asset through a linear […]

Two Types of Ratio Comparisons for Etisalat Finance Essay

In this report we will analyze two Types of Ratio Comparisons first ratio Trend or time-series analysis and second Cross-sectional analysis for Etisalat. We will find liquidity ratios, activity ratios, leverage ratios, profitability ratios, market ratios and the DuPont system for Etisalat. Etisalat Overview Etisalat; UAE’s first telecommunication company laid its foundation in 1976, with a paid up principal of about (AED) 7,906,140,000 And the par value per share is (AED): 1.00. The number of current employees is about 10500 persons. Major owner […]

Understanding the Corporate Debt Market in India Finance Essay

The Planning era began since 1951 and DFIs were increasingly encouraged to finance the project funding needs of the Indian corporate sector. The Government of India and RBI facilitated the concessional rates for corporate sector by giving the following to the DFIs: Access to low cost funds Permission to issue bonds with government guarantee Allocations from budget With the onset of economic reforms, the budgetary support and government guarantee to DFIs was withdrawn. The DFIs converted themselves into commercial banks […]

Validity of the Capm and Alternative Theories Finance Essay

A major sector in finance is the optimization of portfolio. The target is to maximize the excepted return and minimize the risk. In 1952 Harry Markowitz with his theory about portfolio selection made two observations. The first one was that the combinations of two risky assets provide non-cumulative standard deviations since the two assets are positive correlated. Secondly, when a portfolio of risky assets is built, the standard deviation risk of the portfolio is less than the sum of the […]

What is the Importance of Ratio Analysis Finance Essay

Ratio analysis isn’t just comparing different numbers from the balance sheet, income statement, and cash flow statement. It’s comparing the number against previous years, other companies, the industry, or even the economy in general. Ratios look at the relationships between individual values and relate them to how a company has performed in the past, and might perform in the future. Financial ratio analysis is the calculation and comparison of ratios which are derived from the information in a company’s financial […]

Why should we Invest in Mutual Funds Finance Essay

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as […]

Analysis of the Stock Market Using Quantitative Approach Finance Essay

Quantitative finance started in the U.S. in the 1930s as some astute investors began using mathematical formulas to price stocks and bonds. Harry Markowitz’s 1952 Ph.D. thesis “Portfolio Selection” was one of the first papers to formally adapt mathematical concepts to finance. Markowitz formalized a notion of mean return and covariances for common stocks which allowed him to quantify the concept of “diversification” in a market. He showed how to compute the mean return and variance for a given portfolio […]

Consequences of Liquidity Crisis on the Interbank Market Finance Essay

Interbank markets are the mean for the liquidity management and the transmission of monetary policy. Actually they work as the markets that banks use, to trade among themselves in order to remain liquid and meet their liabilities. Interbank markets function with two ways within the financial system. Firstly they can be used from the central banks as their median to intervene and enforce their policies so to configure the desired interest rates. Secondly, a well organized interbank market enable the […]

Does Underwriter Reputation Affect the Performance of Ipo Finance Essay

In this paper we examine the relationship between performance of the Chinese IPO firms and the reputation of investment bankers underwriting their stocks. Similar to previous studies on well-developed stock markets, we find that the initial return on the first day of trading is strongly positive for Chinese IPO stocks due to underpricing. This initial return is negatively related to the underwriter’s reputation, suggesting that the better the reputation of the underwriter, the less underpricing and hence, the lower the […]

Effective Return on Tax Saving Mutual Fund Schemes Finance Essay

Savings are the tool used by a person or an organization that abstains from present consumption for a future use. Investment is an activity that engaged by people who have savings with the aim of achieving additional income or growth in values. It may be defined as ” a commitment of funds made in the expectation of some positive rate of return”. Investors may have different aim for investing their money such as capital appreciation, regular return, safety, proud of […]

Forecasting Effectiveness of the Exchange Rate of Euro Finance Essay

The proposed title for this topic analysis is “forecasting effectiveness of the exchange rate of Euro in the conditions of financial crisis”. Introduction and Background: There has been significant discussion within the financial management literature regarding the forecasting techniques used to analyse future turbulence within the currency exchange rates. This focus, according to Perry (2009) is due to the fact that any such fluctuations have a direct correlation with the profitability of an international firm. Yu et al (2006) has […]

History and Structure of New York Stock Exchange Finance Essay

In this paper, it begins by an interpretation of the role and functioning of stock markets, the New York Stock Exchange is represented in this case. Firstly, it goes through the history of the NYSE, it explains its administrative structure. An overview of the advantages of the stock exchange for both investors and corporations is provided. It analyzes the question of efficiency of financial markets. What is stock exchange? "Stock Exchange An organized marketplace for securities featured by the centralization […]

How Efficient Market Hypothesis Explains Share Price Movements Finance Essay

The Efficient Market Hypothesis is perhaps the most prevalent, controversial and well-known market theory in the world. EMH is one of the arguments made in favour of the stock market. It was developed throughout the 20th Century however it became more prevalent once Eugene Fama penned the term Efficient Market Hypothesis in his thesis from 1970. Since then the theory has grown and evolved, however the basic concept has remained the same. ‘If new information comes onto the market concerning […]

Investigation on Lastminute Coms Ipo and Subsequent Performance Finance Essay

The short-run underpricing and long-run underperformance of initial public offerings (IPOs) are the best documented anomalies in finance. This paper investigates if these anomalies exist in the aftermarket performance of the IPO of an internet-based company, Lastminute.com plc. Further analyses are then carried out to explain the performance results. Evidence are presented that the company’s IPO exhibits positive abnormal returns on the first day of trading. There are several theories of underpricing do not apply in explaining the short-run performance […]

Liquidity Risk in the Finance and Banking Sector Finance Essay

I would like to choose liquidity risk for my assignment. Why I have selected liquidity risk? It is because there are some points or question I would like to understand. First reason is about the financial crisis. At 2007, the financial crisis interpreted how quickly and severely liquidity risk can crystallize and certain sources of funding can disappear. It shows the need for the valuation of assents and capital adequacy. The emergence and development of the financial crisis was fully […]

Market Structure and Competition in the Banking Sector Finance Essay

The rapid economic convergence of Spain in the European Union in the last decade has been mirrored by an equally rapid expansion of its banking industry the Spanish banking sector’s total assets over GDP expanded from 70 to 80 percent of the EU average. At the end of 2007, total assets held by the banking sector amounted to 280 percent of GDP; 110 percentage points higher than in 1997. The Spanish banking sector comprises four types of institutions: (Bank of […]

Methods and Reasons for Investing in Certain Companies Finance Essay

Twelve months ago, you had a $20 000 windfall, and decided to invest all of this money by purchasing shares in companies listed on the ASX. Decide, with reasons, on the companies you invested in, and then access the price you paid for their shares twelve months ago. Discuss the growth, or otherwise, of your investment and compare the performance in the share values of each of the selected companies against an appropriate market indicator. Mathematical Investigations Using ET where […]

Portfolio Theory and Capital Pricing Model are Essential Finance Essay

Portfolio Theory is a theory of investment which try to maximize portfolio expected return for a given amount of portfolio risk, or evenly minimize risk for a given level of expected return, by carefully choosing the proportions of various assets. The expected return on a portfolio is calculated on the stocks which comprise the portfolio. The weights reflect the proportion of the portfolio invest in the stock. This can be expressed as follows: Where: = expected return on the portfolio = number of stocks in the portfolio =the […]

Pricing Options Using Levy Processes and Monte Carlo Finance Essay

The widely known Brownian motion was first introduced in 1828 by a Scottish botanist named Robert Brown. Brown used this concept in order to illustrate an irregularity in patterns of movement by pollen grains suspended in liquid. In 1900, Louis Bachelier considered the Brownian motion as a possible solution to modeling stock market prices. As a result, in 1923, Norbert Wiener was the first to give the Brownian Motion a rigorous definition, reconstructing the model. This use of the Brownian […]

Put Call Parity and Prices of European Put Finance Essay

People who have done financial mathematics before or worked in financial area must be familiar with a terminology called put-call parity. The put-call parity (PCP) describes the relationship between the prices of European put and call options with the same exercise price and time to maturity. It shows that the value of a European call with certain strike price and exercise date can be deduced from the value of a European put with the same strike price and exercise date, […]

Role of a Treasurer in Identification of Risk Finance Essay

Companies have always been facing many risks that gained complexity with the passage of time. Such risks became impossible to be managed by a single person and required the assistance of experts to deal with them. The trend of adopting the globalization policy and exploiting the advantages offered by the international markets has caused many risks to enter the operations of the multinational companies. The management of this risk has been necessary as they cast their impacts directly on the […]

Share Price Earnings Ratio and Foreign Exchange Rate Finance Essay

The stock market has become an important market which plays a vital role in the economy that develops capital formation and sustaining economic growth. Stock market is a listing stock and a statistic reflecting the composite value of its components. It is used to represent of its characteristics of its component of stocks, in which it have the same commonality such as trading in the same stock market, belong in same industry or having similar market capitalization. In the securities […]

Speculative Trading Profits in the Foreign Exchange Market Finance Essay

Introduction Speculation in financial terms means an initial investment on which does not have any safety or there is significant risk of loss on investment. The term speculation is defined by Graham and Dodd’s which means buying share, equity, assets or debts without analysis which involves a significant risk. Others financial said purchase, holding, short-selling of financial instrument, derivatives, collectibles, stocks, commodities (oil and gold) , bonds to gains profits when fluctuations in its price. Where as “investment” is a […]

Study of the Reasons Behind Company Name Changes Finance Essay

A company’s name is commonly considered to be a curial part of its image and reputation, just like the quality of its products or the quality of its services and it is also widely accepted that the corporate name is the cornerstone of a company’s relationship with its customers. (McNamara, 1998). Changing a company’s name is a major policy decision contemplated by many firms and actually implemented by some year. Such name changes are sometimes a result of mergers or […]

Study on Bayer Ag and Multi Listed Securities Finance Essay

The Company Bayer AG was founded on 1st August 1863 by Friedrich Bayer and Johann Friedrich Weskott in Barmen, Germany. Today it is headquartered in Leverkusen, Germany. In order for management purposes Bayer AG was restructured into a holding company in December in the year 2003. All the core businesses were transformed into limited companies which were all managed by Bayer AG. These companies are: Bayer CropScience AG, Bayer HealthCare AG, Bayer Chemicals AG, Bayer MaterialScience AG and the three […]

Study on Initial Public Offerings and Going Public Finance Essay

[Synopsis: This is a 4 page research paper, written in APA format discussing the type of IPO that E-bay should use to take Skype public. This is based on the type of investors Skype is likely to attract, lessons learned from Google and Morningstar from their auction IPOs and the cost and risks of each of the two types of IPO. The paper further describes the steps that a firm must take in order to go public, identifies success factors […]

Study on the Different Types of Forward Contracts Finance Essay

FORWARD CONTRACTS: A forward contract agreement is effective under the consistent critical terms method if all the following criteria are met: 1. The forward contract is for the purchase or sale of the same quantity or notional amount and at the same time as the hedge able item. 2. Upon association with the hedge able item, the forward contract has a zero fair value. 3. The references rate of the forward contract is consistent with the reference rate of the […]

Study on the Us Stores Takeover of Morrisons Finance Essay

The US Stores’ market performance is unsatisfied. The share price and P/E ratio of the firm have been dropping. The company intends to carry out a strategy to expand world-wide markets by acquiring a major UK retailer. Merger and acquisition is one of the approaches to achieve the corporate strategies, such as expanse the market share and proportion of products. In this takeover proposal, the motives for US Stores’ takeover are investigated from different aspects. The fair valuation of quasi-acquired […]

Suitability of Black Scholes Model and Pricing Derivatives Finance Essay

Since the Black-Scholes (B-S) Model was proposed, it became a widely used pricing model in the options market. This paper critically discusses the suitability of using the Black-Scholes model for pricing derivatives from two points: its own accuracy and the accuracy of input data. Finally, it is safety to conclude that the B-S pricing model is only the best tool currently. Introduction of the Black-Scholes (BS) option pricing model Since the option firstly came into the market in1973, it became […]

The Credit Crunch and Fall of Northern Rock Finance Essay

Who invented the term credit crunch is unclear but it was used in study by America’s Federal Reserve Bank as far back as 1967. (“The Sunday Times” January 4, 2010)1 Financial crises have intervened the operation of financial markets over years. Most noticeably the great depression in 1929-30, the 1970s inflation crises and the banking crises in the 1990s created confusion in the financial markets causing severe disruption. The current financial crisis which emerged in 2007, although the roots were […]

Financial Markets Essays