Financial market

Firstly, the strategy used was a conservative approach, meaning that the stocks that were to be invested in are less risky and profitable. The second reason this week was interesting since the market had been active for three weeks now and a conservative stock purchase could also be because you are more comfortable buying a stock that you’ve had time to watch and research for the past three weeks. There are two ways to look at being conservative - first is clearly finding and researching a stock…

Though Tata Motors bid the highest in the auction, it had treaded cautiously and had gathered much information to ascertain the value of JLR to the Tata Group. It saw the acquisition an opportunity to expand its presence in the passenger car market beyond India and the clout necessary to compete with international players22. Tata Motors believed the acquisition to provide significant potential for revenue synergies, access to world-class engineering capability and avenues of strong relationship…

The Birth of Bull and Bear Markets as Financial Terms The terms, "Bull," and "Bear" for the state of the market are inspired by the typical way in which these two animals attack in real life scenarios. The bull is generalized to attack by forcing its horns up into the air, symbolizing the upward trend of a bull market. In contrast, the bear is generalized to swing its paws down upon its prey; thus serving as a symbol for downward trends. Stock market conditions are defined commonly either by…

Model: ABD Communications is a fast-growing IT start-up and dividends for the next 5 years are projected to grow at 25%, 20%, 15%, 10% and 5% respectively. Subsequently from the 6th year, dividends will grow at a constant rate of 5%. If the current market price is $46 and the most recent dividend was $2 per share with a cost of equity is 10%, is it considered a suitable investment? The dividends for the high growth phase (First 5 years) can be summarised as below: Year Growth Rate Dividend per…

elimination of unsystematic risk can be achieved first by measuring the level of diversification needed. Diversification can be computed through correlation between returns and of the portfolio and the market portfolio. An absolutely diversified portfolio will correlate accurately with completely diversified market portfolio since only has a systematic risk. Portfolio performance measures are the most important aspects of the investment process. Performance measures enable the availability of…

penny stock typically trades outside of the major market exchanges at arelatively low price and has a small market capitalization. These stocks aregenerally considered highly speculative and high risk because of their lack ofliquidity, large bid-ask spreads, small capitalization and limited following anddisclosure. They often trade over-the-counter through the OTC Bulletin Board(OTCBB) and pink sheets The term penny stock has evolved with the market. Inthe past, penny stocks where stocks that…

A. Calculate the expected value of the alternating St. Petersburg lottery in form of an infinite series? Fair gamble: In the Lottery gamble, this is chance of winning or losing for the person. A lottery is a fair gamble L=[x, -x; 1/2, 1/2\] Such that Ex= Where, x is the random variable events. The St. Petersburg Paradox: S. No: Outcomes Prices Probability 1 H $2 1/2=0.5 2 TH -$4 1/4=0.25 3 TTH $8 1/8=0.125 4 TTTH -$16 1/16=0.0625 5 TTTTH $32 1/32=0.03125 --- --- --- --- N n(T…..T)H…

paper examines the model proposed by Green and Porter, which is a model of dynamic price competition under imperfect monitoring, i.e. firms encounter the problem of detecting and deterring deviation from the agreement. Firms can only observe the market price, but do not know the actual production level of another firm. Unexpected fall in prices may account for deviation from the colussive output or bad demand shock. So firms can deter deviation only by threatening to set Cournout quantities,…

spread in NPL portfolio market. In order to examine this theory, hypothetical CDS was priced using real-world data for both CO date and most recent 2017 date. CDS form is selected following Italian securitization law where CDS was used as the guarantee. However, a single-name derivative is priced (versus basket CDS applied in Italian securitization law). As an underlying asset of hypothetical CDS Target portfolio is selected. The price of CDS is then compared with a real CDS market data. As…

Markowitz Portfolio Theory One of the major area of finance is optimizing the portfolio. Basically, portfolio theory deals with the risk and value of portfolio instead of individual securities, which is known as Markowitz portfolio theory that is suggested by Harry Markowitz in his article “Portfolio selection” in the Journal of Finance. Markowitz portfolio theory basically helps in making optimum portfolio by interpreting, and evaluating risk and return of different risky assets. Basically, the…