Essays on Future Date

International Investments Diversification

International Investments Diversification The term global portfolio refers to a group of investments, assets and securities held in foreign markets rather that the domestic market. Traditionally, investors have preferred to focus on international portfolio investment when it comes to the investment in marketable securities. As opposed to the only domestic portfolios, the international portfolio yields more value for the same level of risk. Ideally, an investor should analyze the global stock market to identify the markets that are related to their domestic stock/ securities market in terms of risks and rewards (Agati, 2007). This helps investors reduce their anxiety ...

Summary: Time Value of Money

The concept of compounding is deeply embedded in our everyday life, and this calls for our attention to understand the basics of time value of money. Important to note, the concept of time Value of Money asserts that value of a dollar received today is more than the same amount of dollar received at a future date. Stated simply, a dollar today cane invested in a return generating asset, and at future period, the investor will get additional interest on the money invested. Stated below are some of the reasons as why money has time value: a)Risk and ...

Reasons for the severe decline in Chinese Stock market in 2015

Between June 2014 and June 2015, the CSI 300 Index rose by 150%, reaching the peak at 5,166.3 on 12th June 2015. What follows was a severe decline in the stock index. Within just one month, the CSI 300 index had lost 30% to 3,507 on July 8. Several factors caused the fall.

Short selling

In the run-up to the stock market decline, investors were aggressively involved in short selling and margin trading. Short-selling and margin trading allowed investors to purchase shares using borrowed money thereby increasing the demand for stocks. Investors engaged in short-selling sell stocks borrowed from ...

Situation

Speculative Strategy: Currency options Option premium = 1,000,000 × 0.0005 = $500 As shown by the diagram, currency options will help ABC Corporation to mitigate the currency risk. It is speculative since it not only protects the firm from unfavourable movements in the exchange rate but also gives it an opportunity to gain profits. It protects the company from downward movements in the exchange rate since the minimum it can receive is $9,200 irrespective of how low the rate falls. However, the gains from forward exchange rate movements are not limited. If the exchange rate is more than the ...