...Hedge Funds: A liability for the economy? Sander van Bentum 362107 Max Wielitsch 385533 Dhr. B. Tims 17-10-2013 Table of Contents Introduction 3 Risks for the investors 4 The creation of risks to financial institutions 5 The excess volatility risk 6 Transparency 6 Unlevel playing field 7 Hedge funds and financial bubbles 7 The role of hedge funds in crises 8 Conclusion 10 Bibliografy 10 Introduction Everybody that is somewhat involved with finance has probably at some point heard of the term hedge fund. But what is it exactly? In simple words it can be described as, ‘’an actively managed, pooled investment vehicle that is open to only a limited group of investors and whose performance is measured in absolute return units’’ (Connor et al. 2003). This limited group of investors contain wealthy investors who would be able to cope with possible losses. Commonly hedge funds make use of arbitrages and price discrepancies, terms that are also known as inefficiencies within the market. By making small profits on a large scale by identifying these market inefficiencies and attempting to correct them these hedge funds claim to help the market become more efficient. Hedge Funds first made their appearance on to the global financial stage in 1949, when the first hedge fund was created by Alfred W. Jones. ‘’He raised $60,000 and invested $40,000 of his money to pursue a strategy of investing in common stocks and hedging the positions with short sales’’...
Words: 2952 - Pages: 12
...{DC(-P[,"^q-' li Frauds of the Century BERNARD MADOFF worked as a lifeguard to eam enough money to start his own securities firm. Almost half a century later, the colossal Ponzi scheme into which it mutated has proved impossible to keep afloat unlike Mr Madoffs 55-foot fishing boat, "Bull,,. The $ I 7. I billion that Mr Madoff claimed to have under management earlier this year is all but gone. His alleged confession that the fraud could top $50 billion looks increasingly plausible:, ' clients have admitted to exposures amounting to more than half that. On December l6th the head of the Securities Investor Protection Corporation, which is recovering what it can for investors, said the multiple sets of accounts kept by the 70-year-old were in "complete disanay" and could take six months to sort out. It is hard to imagine a more apt end to Wall Street's worst year in decades. The known list of victims grows longer and more star-studded by the day. Among them are prominent billionaires, including Steven Spielberg; the owner of the New York Mets baseball team; Carl Shapiro, a nonagenarian clothing magnate who may have lost $545m; thousands of wealthy retirees; and a cluster of mostly Jewish charities, some of which face closure. Dozens of supposedly sophisticated financial firms were caughl out too,.including banks such as Santander and HSBC, and Fairfield Greenwich, an alternative-investment specialist that had funnelled no ...
Words: 1445 - Pages: 6
...confession that the fraud could top $50 billion looks increasingly plausible: clients have admitted to exposures amounting to more than half that. On December 16th the head of the Securities Investor Protection Corporation, which is recovering what it can for investors, said the multiple sets of accounts kept by the 70-year-old were in “complete disarray” and could take six months to sort out. It is hard to imagine a more apt end to Wall Street's worst year in decades. The known list of victims grows longer and more star-studded by the day. Among them are prominent billionaires, including Steven Spielberg; the owner of the New York Mets baseball team; Carl Shapiro, a nonagenarian clothing magnate who may have lost $545m; thousands of wealthy retirees; and a cluster of mostly Jewish charities, some of which face closure. Dozens of supposedly sophisticated financial firms were caught out too, including banks such as Santander and HSBC, and Fairfield Greenwich, an alternative-investment specialist that had funnelled no less than $7.5 billion to Mr Madoff. Though his operation resembled a hedge-fund shop, he was in fact managing client money in brokerage accounts within his firm, seemingly as Merrill Lynch or Smith Barney would. A lot of this came from funds of funds, which invest in pools of hedge funds, and was channelled to Mr Madoff via “feeder funds” with which he had special relationships. Some banks, such as the Dutch arm of Fortis, lent heavily to funds of funds that wanted to...
Words: 1298 - Pages: 6
................................. 2 Errata Sheet................................................................................................................................................. 2 The Level II Examination and Completion of the Program ................................................................... 3 Topic 1: Professional Standards and Ethics ......................................................................................... 4 Topic 2: Introduction to Alternative Investments................................................................................ 6 Topic 3: Real Assets .............................................................................................................................. 20 Topic 4: Hedge Funds ........................................................................................................................... 29 Topic 5: Commodities ........................................................................................................................... 48 Topic 6: Private Equity ........................................................................................................................ 54 Topic 7: Structured Products .............................................................................................................. 64 Topic 8:...
Words: 31020 - Pages: 125
...is an issue for institutional investors. For this purpose, we first show how model risk (which turns out to be equivalent to special cases of ambiguity) affects optimal portfolio allocation. Using average portfolio holdings for traditional and alternative asset classes of 119 institutional investors, we then calibrate our model to implicitly determine the ambiguity factors of different asset classes. We find that institutional investors are strongly ambiguity-averse, as documented by a Sharpe ratio that is only 60 percent that of an (unambiguous) efficient portfolio. In line with intuition, we document that equity and bond portfolios have a rather low ambiguity, while alternative investments such as real estate, private equity, and hedge fund investments exhibit a very high ambiguity. These results are robust with regard to the size of the expected returns supposed by the investors. Keywords: Ambiguity aversion; alternative investments; portfolio allocation; institutional investors. 1. Introduction One of the major contributions of the capital asset pricing theory (CAPM) is a simple optimal...
Words: 9356 - Pages: 38
...chak de phattey The Call for Participation for Wikimania 2009 has been released. Submit your presentations before April 15. [Hide] [Help us with translations!] Enron scandal From Wikipedia, the free encyclopedia Jump to: navigation, search Enron Corporation Type Defunct / Asset-less Shell Founded Omaha, Nebraska, 1985 Headquarters Houston, Texas, United States Key people Kenneth Lay, Founder, former Chairman and CEO Jeffrey Skilling, former President, CEO and COO Andrew Fastow, former CFO Rebecca Mark-Jusbasche, former Vice Chairman, Chairman and CEO of Enron International Stephen F. Cooper, Interim CEO and CRO John J. Ray, III, Chairman Industry formerly Energy Revenue $101 billion (in 2000) Employees approx. 22,000 in 2000 approx. 4 as of 2008. Website http://www.enron.com/ The Enron scandal was a financial scandal involving Enron Corporation (former NYSE ticker symbol: ENE) and its accounting firm Arthur Andersen, that was revealed in late 2001. After a series of revelations involving irregular accounting procedures conducted throughout the 1990s, Enron was on the verge of bankruptcy by November 2001. A white knight rescue attempt by a similar, smaller energy company, Dynegy, was not viable. Enron filed for bankruptcy on December 2, 2001. As the scandal was revealed, Enron shares dropped from over US$90.00 to less than 50¢. Enron's plunge occurred after revelations that much of its profits and revenue were the result of deals with special...
Words: 11267 - Pages: 46
...fundamentals of cost accounting fourth edition William N. Lanen Shannon W. anderson Michael W. Maher ® accounting The integrated solutions for Lanen/Anderson/Maher’s Fundamentals of Cost Accounting, 4e have been proven to help you achieve your course goals of improving student readiness, enhancing student engagement, and increasing their comprehension of content. Known for its clear and engaging style, the Lanen solution employs the use of real-world scenarios, LearnSmart, and instant feedback on practice problems to help students engage with course materials, comprehend the content, and achieve higher outcomes in the course. Our new Intelligent Response Technology-based content offers students an intelligent homework experience that helps them stay focused on learning instead of navigating the technology. Finally, McGraw-Hill’s adaptive learning component, LearnSmart, provides assignable modules that help students master core concepts and come to class more prepared. LearnSmart with Lanen is an introductory managerial accounting review, providing students with a refresher on these topics for their cost accounting course. PROVEN EFFECTIVE Get Connected. FEATURES Intelligent Response Technology Intelligent Response Technology (IRT) is Connect Accounting’s new student interface for end-of-chapter assessment content. Intelligent Response Technology provides a general journal application that looks and feels more like what you would find in a general ledger...
Words: 233973 - Pages: 936
...HOW CAPITALISM WILL SAVE US Why Free People and Free Markets Are the Best Answer is Today's Economy S T E V E FORBES and E L I Z A B E T H A M E S HOW CAPITALISM WILL SAVE US HOW CAPITALISM WILL SAVE US W h y Free People and Free Markets A r e t h e Best A n s w e r i n Today's E c o n o m y Steve Forbes AND ELIZABETH AMES CROWN BUSINESS ALSO BY STEVE FORBES Power Ambition Glory (coauthored with John Prevas) Flat Tax Revolution A New Birth of Freedom To the millions of individuals whose energy, innovation, and resilience built the Real World economy. Their enterprise, when unleashed, is always the answer. Copyright © 2009 by Steve Forbes and Elizabeth Ames All rights reserved. Published in the United States by Crown Business, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York. www.crownpublishing.com CROWN BUSINESS is a trademark and CROWN and the Rising Sun colophon are registered trademarks of Random House, Inc. Library of Congress Cataloging-in-Publication Data Forbes, Steve, 1947How capitalism will save us / Steve Forbes and Elizabeth Ames.—1st ed. p. cm. Includes index. 1. Capitalism—United States. 2. United States—Economic policy. 3. United States—Economic conditions. I. Ames, Elizabeth. II. Title. HB501.F646 2009 330.12'20973—dc22 2009032751 ISBN 978-0-307-46309-8 Printed in the United States of America DESIGN BY BARBARA S T U R M A N 1O 9 8 7...
Words: 210110 - Pages: 841
...College of New York, New York, NY, USA Fuqua School of Business, Duke University, Durham, NC, USA Pamplin College of Business, Virginia Polytechnic Institute and State University, Blacksburg, VA, USA School of Management, University of Michigan-Dearborn, MI, USA College of Business Administration, San Diego State University, San Diego, CA, USA Department of Accounting, University of Arkansas at Little Rock, AR, USA Zicklin School of Business, CUNY – Baruch College, New York, NY, USA Belk College of Business, University of North Carolina at Charlotte, NC, USA College of Business and Economics, West Virginia University, Morgantown, WV, USA RSM Erasmus University, Department of Financial Management, Rotterdam, The Netherlands Mohamed E. Bayou Chee W. Chow Cynthia M. Daily Harry Z. Davis Nabil Elias Arron Scott Fleming Frank G. H. Hartmann vii viii LIST OF CONTRIBUTORS Fred A. Jacobs Frances Kennedy James M. Kohlmeyer, III Leslie Kren John Y. Lee Michael S. Luehlfing Adam S. Maiga School of Accountancy, Georgia State University, Atlanta, GA, USA Department of Accountancy and Legal Studies, Clemson University, SC, USA College of Business, East Carolina University, Greenville, NC, USA School of Business, University of Wisconsin, Milwaukee, WI, USA Lubin School of Business, Pace University, Pleasantville, NY, USA School of Professional Accountancy, Louisiana Tech University, LA, USA School of Accounting, Florida International University, Miami, FL, USA I.H. Asper...
Words: 111886 - Pages: 448
...Transactions and Strategies Economics for Management This page intentionally left blank Transactions and Strategies Economics for Management ROBERT J. MICHAELS Mihaylo College of Business and Economics California State University, Fullerton Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Transactions and Strategies: Economics for Management Robert J. Michaels Vice President of Editorial, Business: Jack W. Calhoun Publisher: Joe Sabatino Sr. Acquisitions Editor: Steve Scoble Supervising Developmental Editor: Jennifer Thomas Editorial Assistant: Lena Mortis Sr. Marketing Manager: John Carey Marketing Coordinator: Suellen Ruttkay Marketing Specialist: Betty Jung Content Project Manager: Cliff Kallemeyn Media Editor: Deepak Kumar Sr. Art Director: Michelle Kunkler Frontlist Buyer, Manufacturing: Sandee Milewski Internal Designer: Juli Cook/ Plan-It-Publishing, Inc. Cover Designer: Rose Alcorn Cover Image: © Justin Guariglia/Corbis © 2011 South-Western, Cengage Learning ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means— graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution, information storage and retrieval systems, or in any other manner—except as may be permitted by the license terms herein. For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support...
Words: 234748 - Pages: 939
...FAMILY OF SECRETS The Bush Dynasty, America’s Invisible Government, and the Hidden History of the Last Fifty Years RUSS BAKER Contents Foreword by James Moore 1. How Did Bush Happen? 2. Poppy’s Secret 3. Viva Zapata 4. Where Was Poppy? 5. Oswald’s Friend 6. The Hit 7. After Camelot 8. Wings for W. 9. The Nixonian Bushes 10. Downing Nixon, Part I: The Setup 11. Downing Nixon, Part II: The Execution 12. In from the Cold 13. Poppy’s Proxy and the Saudis 14. Poppy’s Web 15. The Handoff 16. The Quacking Duck 17. Playing Hardball 18. Meet the Help 19. The Conversion 20. The Skeleton in W.’s Closet 21. Shock and . . . Oil? 22. Deflection for Reelection 23. Domestic Disturbance 24. Conclusion Afterword Author’s Note Acknowledgments Notes Foreword When a governor or any state official seeks elective national office, his (or her) reputation and what the country knows about the candidate’s background is initially determined by the work of local and regional media. Generally, those journalists do a competent job of reporting on the prospect’s record. In the case of Governor George W. Bush, Texas reporters had written numerous stories about his failed businesses in the oil patch, the dubious land grab and questionable funding behind a new stadium for Bush’s baseball team, the Texas Rangers, and his various political contradictions and hypocrisies while serving in Austin. I was one of those Texas journalists. I spent about a decade...
Words: 249168 - Pages: 997
...Handbook of Management Accounting Research Volume 3 Edited by CHRISTOPHER S. CHAPMAN Imperial College London, UK ANTHONY G. HOPWOOD University of Oxford, UK MICHAEL D. SHIELDS Michigan State University, USA AMSTERDAM – BOSTON – HEIDELBERG – LONDON – NEW YORK – OXFORD PARIS – SAN DIEGO – SAN FRANCISCO – SINGAPORE – SYDNEY – TOKYO Elsevier The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, UK First edition 2009 Copyright © 2009 Elsevier Ltd. All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone ( 44) (0) 1865 843830; fax ( 44) (0) 1865 853333; email: permissions@elsevier.com. Alternatively visit the Science and Technology Books website at www.elsevierdirect.com/rights for further information Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for...
Words: 187223 - Pages: 749
...62118 0/nm 1/n1 2/nm 3/nm 4/nm 5/nm 6/nm 7/nm 8/nm 9/nm 1990s 0th/pt 1st/p 1th/tc 2nd/p 2th/tc 3rd/p 3th/tc 4th/pt 5th/pt 6th/pt 7th/pt 8th/pt 9th/pt 0s/pt a A AA AAA Aachen/M aardvark/SM Aaren/M Aarhus/M Aarika/M Aaron/M AB aback abacus/SM abaft Abagael/M Abagail/M abalone/SM abandoner/M abandon/LGDRS abandonment/SM abase/LGDSR abasement/S abaser/M abashed/UY abashment/MS abash/SDLG abate/DSRLG abated/U abatement/MS abater/M abattoir/SM Abba/M Abbe/M abbé/S abbess/SM Abbey/M abbey/MS Abbie/M Abbi/M Abbot/M abbot/MS Abbott/M abbr abbrev abbreviated/UA abbreviates/A abbreviate/XDSNG abbreviating/A abbreviation/M Abbye/M Abby/M ABC/M Abdel/M abdicate/NGDSX abdication/M abdomen/SM abdominal/YS abduct/DGS abduction/SM abductor/SM Abdul/M ab/DY abeam Abelard/M Abel/M Abelson/M Abe/M Aberdeen/M Abernathy/M aberrant/YS aberrational aberration/SM abet/S abetted abetting abettor/SM Abeu/M abeyance/MS abeyant Abey/M abhorred abhorrence/MS abhorrent/Y abhorrer/M abhorring abhor/S abidance/MS abide/JGSR abider/M abiding/Y Abidjan/M Abie/M Abigael/M Abigail/M Abigale/M Abilene/M ability/IMES abjection/MS abjectness/SM abject/SGPDY abjuration/SM abjuratory abjurer/M abjure/ZGSRD ablate/VGNSDX ablation/M ablative/SY ablaze abler/E ables/E ablest able/U abloom ablution/MS Ab/M ABM/S abnegate/NGSDX abnegation/M Abner/M abnormality/SM abnormal/SY aboard ...
Words: 113589 - Pages: 455
