...PAPER ON “Gold ETF’s – An Investment Option” By Pawan Walecha (M.B.A.-Finance) pavan_walecha@rediffmail.com 9595532810; 9819420664 Gold ETF’s – An Investment Option Abstract Financial investment is putting money into something with the expectation of gain that upon thorough analysis has a high degree of security for the principal amount, as well as security of return, within an expected period of time. Gold has been used as a store of value and form of currency since ancient times. Gold has always been a symbol of stability and wealth. People tend to think about buying gold more as a saving than vehicle for as an investment but it does not need to be so. Gold has the same features as every other asset worth investing in, whether stock, bonds, mutual funds, or even commodities like corn, tobacco, crude oil or other precious metals. The present paper aims at discovering and analyzing risk in the emerging security in the stock market i.e Gold ETFs. The basic aim of the study is to study the financial performance of Gold etfs and to check its suitability for inclusion of gold etfs, rating of selected Gold etfs is also done based on funds performance. Keywords: Gold Exchange Traded Funds, Beta, Performance evaluation, NSE. Introduction The idea of Gold ETF was first conceptualized by Benchmark Asset Management Company Private Ltd. in India, when they filed a proposal with the SEBI in May 2002. However, there was no regulatory approval then and later it was launched in March...
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...CASE STUDY A STUDY ON “MISMATCH BETWEEN DEMANDS FOR AND SUPPLY OF GOLD’’ CASE STUDY SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF MASTERS OF BUSINESS MANAGEMENT COURSE OF ALLIANCE UNIVERSITY SUBMITTED TO PROF DR.SAMIK SHOME (SENIOUR LECTURER) ALLIANCE BUSINESS SCHOOL SUBMITTED BY ABHISHEK M.R RAHUL CHARU BALDWA SHEIKH PARVESH T.SHAMEEL (2012-14, Section H) Group 01 LIST OF CONTENTS Serial Number | Contents | Page number | 1 | Executive summary | | 2 | Issue analysis | | 3 | Data analysis | | 4 | Key decision criteria | | 5 | Alternatives analysis | | 6 | Statistical data | | 7 | Non-Price factors | | 8 | Conclusion | | Executive summary India is one of the largest consumers of gold in the world. India’s share alone for the demand of gold comes to around 25%, which is a very large number considering there are around 200 countries in this planet. One of the main possibilities for this astronomical demand for gold in India might be because of the fact that gold plays a major role in Indian culture. Festivals like Diwali and AkshayaTritiya demand the use of the gold irrespective of the fact that gold is a very costly metal. Gold is a commodity which represents status symbol (conspicuous goods) The reasons why there is a mismatch between the demand and the supply of gold in India is quite obvious. Hutti gold mine company in Karnataka being the only company in India to mine and process gold ore and the fact that...
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...BANKING CRISIS JUNE 1772 INTRODUCTION Great Britain experienced an economic boom in the years building up to the financial crisis of 1772. Exports to America surged and London became an important network between provincial financial areas. This network was the catalyst for the lack of confidence that spread after the collapse of London banking house Neal, James, Fordyce and Down. The man held responsible for this collapse was banking partner Alexander Fordyce. Fordyce had speculated wildly, shorting East India Company shares while funding his losses using customers’ deposits. Once the news of the collapse hit Edinburgh the system of trust which had kept the credit structure afloat was gone. The Douglas, Heron & Company, operating as the Ayr bank, was established in Scotland in 1769 based on the scheme championed by Scotsman John Law. Law believed that confidence was the basis of credit. Before this paper money had to be backed by gold, he felt banknotes would be just as valuable as coins of silver and gold. This made credit very risky as it now became dependent almost solely on confidence. Virtually overnight the bank handed out excessive loans to their privileged customers, with little or no collateral. Several branches opened throughout Scotland, its main aim was to enhance and support the expansion of agriculture, trade and business. The bank brought with it a sense of optimism and confidence which led to customers overlooking the unlimited liabilities they faced...
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...Fukuda, Shin-ichi, “The Structural Determinants of Invoice Curencies in Japan: The Case of Foreign Trade with East Asian Countries,” in Takatoshi Ito and Anne O. Krueger eds., Financial Deregulation and Integration in East Asia, Chicago: University of Chicago Press, 1996, pp.147-163. Goldstein, D.J. “Foreign Direct Investment in the United States and National Security Policy.” Comparative Strategy, 1988, 7, pp. 143-158. Grassman, Sven. “A Fundamental Symmetry in International Payment Paterns.” Journal of International Economics, 1973, 3, pp.105-116. Hartmann Philip. “Curency Competition and Foreign Exchange Markets: the Dolar, the Yen and the Euro.” Cambridge University Press, 1998. Hayek. F. A. “The Denationalization of Money.” 2d ed. London :Institute of economic Afairs, 1970. Ito, Takatoshi, “The Yen and the International Monetary System,” in C.F. Bergsten and M. Noland, eds., Pacific Dynamism and the International Economic System, Washington, D.C.: Institute of International Economics, 1993, pp.299-322. K. Sato, “The International Use of the Japanese Yen: The Case of Japan's Trade with East Asia”, The World Economy, 22 (4), 1999, pp. 547–584. Kenen, Peter B. “International Money and Macroeconomics,” in K.A. Eliot and J. Wiliamson eds., World Economics Problems , Institute for International Economics, Washington, 1988. Li Daokui, Liu Linlin,”To Promote the Internationalization of RMB in a way of Dual System”, China Finance, 2008, No. 10, pp: 42-43. Lin Yifu, “Three Conditions...
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...“A STUDY ON PROBLEM FACED BY GOLD INDUSTRY AND PROVIDING FEASABLE SOLUTONS TO OVERCOME IT” Dishant Gosain1 Mehak Ahuja2 Sonu Kumar3 1, 2, 3 Student, Delhi School Of Management, Delhi Technological University (formerly DCE), New Delhi, India dishant3281@gmail.com, mehak.ahuja3@gmail.com, sonurca11@gmail.com ABSTRACT In India, gems and jewellery has always symbolized wealth and prestige. It has always ignited desire unlike any other object of importance. This industry has always been an important driver of Indian economy with its great influence in large-scale employment generation, earnings from foreign exchange through exports, and value addition. The Indian gold industry, which has a vast potential of being a kingpin of the financial system of India, is currently facing potential stagnation, with difficulties at multiple fronts. It is hence essential for its various stakeholders, like the government, Reserve Bank of India, and the gold industry, to initiate large-scale transformation so as to ensure a sustainable and well modulated industry. In this article we try to develop a clear policy framework to address key structural and regulatory challenges. The various institutional mechanisms required to bring the entire gold industry under standard and uniform governance to pilot long term direction setting on gold are formulated and numerous suggestions on reducing the supply constraints in gold without perturbing CAD have been proposed. The aim of the article is...
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...WO R LD G O L D CO U NCI L UTILISATION OF BORROWED GOLD BY THE MINING INDUSTRY DEVELOPMENT AND FUTURE PROSPECTS Ian Cox, Ian Emsley Research Study No. 18 UTILISATION OF BORROWED GOLD BY THE MINING INDUSTRY DEVELOPMENT AND FUTURE PROSPECTS Ian Cox, Ian Emsley Research Study No. 18 April 1998 WO R LD G O L D CO U NCI L 2 CONTENTS The Authors..............................................................................................................4 Acknowledgements ................................................................................................5 Foreword ..................................................................................................................6 Introduction..............................................................................................................8 Summary ..................................................................................................................9 Part One The Growth in Mine Utilisation of Borrowed Gold ........................................11 The Case for Hedging ..........................................................................................15 Hedging Instruments – Their Development and Usage ................................19 Australia ................................................................................................................21 North America ..................................................................................................
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...Finance Volume 9 | Issue 1 Article 3 6-5-2012 Modelling and forecasting volatility in the gold market Stefan Trück Macquarie University, stefan.trueck@mq.edu.au Kevin Liang Macquarie University Follow this and additional works at: http://epublications.bond.edu.au/ijbf Recommended Citation Trück, Stefan and Liang, Kevin (2012) "Modelling and forecasting volatility in the gold market," International Journal of Banking and Finance: Vol. 9: Iss. 1, Article 3. Available at: http://epublications.bond.edu.au/ijbf/vol9/iss1/3 This Journal Article is brought to you by the Faculty of Business at ePublications@bond. It has been accepted for inclusion in International Journal of Banking and Finance by an authorized administrator of ePublications@bond. For more information, please contact Bond University's Repository Coordinator. Trück and Liang: Forecasting volatility in the gold market International Journal of Banking and Finance, Volume 9 (Number 1), 2012: pages 48-80 MODELLING AND FORECASTING VOLATILITY IN THE GOLD MARKET Stefan Trück and Kevin Liang Macquarie University, Australia _____________________________________________ Abstract We investigate the volatility dynamics of gold markets. While there are a number of recent studies examining volatility and Value-at-Risk (VaR) measures in financial and commodity markets, none of them focuses on the gold market. We use a large number of statistical models to model and then forecast daily volatility and...
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...only since the beginning of the hyper-expansive monetary policy witnessed during the financial crisis of the past five years. Given the current indebtedness of many governments because of the global financial crisis and rising inflation, it is necessary to study the inflation-linked government bonds in order to remove the uncertainty of future inflation rate. Also it is important to analyze the opinion of the academic community towards policy framework and understand the perspective and vision of implication of policy, to focus and highlight the recommendations and suggestions based on the policy framework, implications, and functioning keeping in mind each and every section which may have positive or negative impact of the policy. Rationale for selecting the project (policy) Traditionally, in uncertain times, gold was considered the safest investment option - a liquid asset which promised better returns than most instruments. As India's policies started faltering, investors started flocking to gold. This gold rush has added to India's already increasing current account deficit (CAD). That has had a snowballing effect, which has exposed India's weak macro fundamentals. Now, to accustom Indians away from investing in gold and to restore investor confidence, the government has introduced inflation-indexed bonds. The rationale behind selecting the Inflation Indexed Bonds for the project study is that as...
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...Module 1 Introduction to financial risk management (FRM) Financial Risk Management Module 1 Introduction to financial risk management Question 1 In 2009 which organisation posted the biggest corporate loss in US history and in the same month announced staff bonuses in excess of USD 450 million? a. b. c. d. American International Group (AIG). Lehman Brothers. General Motors. Merrill Lynch. Question 2 The Gig, an Australian heavy metal band, has decided to let its fans invest in the music industry and guaranteed that for every $100 invested in The Gig Music Fund they will get a monthly dividend of $12.00. After six months $20 million has been invested and the depositors have all received $12.00 a month. A spokesman announced that the band needs to raise an additional $5 million to fund a new album and offers music lovers $15 per month for every new $100 invested. Your parents are aware you are completing a financial risk management course and ask your advice as to whether or not to invest. You respond: a. b. c. d. The Gig has a proven track record of paying dividends so go ahead with the investment. The new album is a guaranteed success, so there is little risk involved. This appears to be a Ponzi scheme so reject the offer. Everyone so far has made money and hundreds of people have already done their research, so it is a quality investment. Question 3 The board of South Soap Ltd, an Australian soap manufacturer exporting throughout the...
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...Introduction When the stock market goes up one day, and then goes down for the next five, then up again, and then down again, that’s what you call market volatility. Historically, the volatility of the stock market is roughly 20% a year and 5.8% a month, but volatility keeps on changing, so we go through periods of high volatility and low volatility. Analysts and experts have different opinions about what you should do in volatile markets, and how to scope with stock market volatility or the tendency for share prices rising and falling. Analysts. Justin Stewart, co-founder of Seven Investment Management says: “ Crashes happen. If you are a longer-term investor, you should look straight through them and remember the power of compounding dividends, or in cone arising on income.” Andrew Humphries, a director of St James Place Wealth Management, thinks that Diversification is very important and having a portfolio that is solely exposed to one asset class- be it equities, bond or property- is dangerous and all investors should ensure they hold an appropriate range of assets” Andrew Bell, the chief executive of Witan Investment trust advised: “ It is better to buy into fear and cheapness and sell into euphoria and high valuation, as long as you can endure the period before trends reverse. Investors should have this tattooed somewhere to prevent natural human psychology from making them do the opposite. Bill Mott, the manager of PSigma income, said “ in an uncertain world, investors...
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...CHAPTER 1 1.0 INTRODUCTION This chapter traces the background of the study covering definition of AR-RAHNU system, its history and the benefits that make it accepted even among non Muslim society. And then, a comparative analysis is done between AR-RAHNU with conventional pawnshop. Since this study was done at AR-RAHNU Bank Rakyat, thus the background also will cover a little about Bank Rakyat and then goes through its AR-RAHNU system. In this chapter, problem statement, objective of the study, scope and significance of the study also be presented. 1.1 Background of Study People say diamonds are women’s best friend while gold jewelry is their true friend. In reality, this is at least true among Malaysian women. The reason is, other than to enhance women’s look, the jewellery also could be functioned as collateral whenever cash is needed by using pawn broking financing. As we can see, pawnshop has become a common activity to Malaysian especially among the Malays community and has an overwhelming responses among the poor and middle class in Malaysia to have financial sources quickly and easily. On that basis, many pawnshops and pawnbrokers exist to offer this service. Pawnbroking is a business of advancing loans to customers who have pledged their personal belongings as security. The pawnbroker's trade is one of the oldest known, having existed 2,000–3,000 years ago in China, as well as in ancient Greece and Rome. 1.1.1 CURRENT SCENARIO Among the current scenarios...
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...CHAPTER 1 INTRODUCTION 1.0 INTRODUCTION This chapter discusses on the introduction of this study. This includes the background 0f the study, background of the Bank Rakyat, problem statement, objectives of the study, research questions, and significance of the study. This chapter also discusses on scope and limitations of study and definition of term. 1.1 BACKGROUND OF THE STUDY For the past few years, a pawn broking has taken place in our country. It has been started since the 15th century which was introduced by the Chinese traders during the Malacca Sultanate. Then, it continued to expand after the discovery of tin mining in Larut in the 19 century. Pawn broking can be traced back to at least 3,000 years in ancient China. It also has been found in the earliest written histories of Greek and Roman civilizations. According to the Islamic Financial Services Board (IFSB), the Ar- Rahnu scheme can demonstrate its roles as a viable microcredit product of the financial institution in meeting the different customer requirements. Firstly, it represents a credit channel to those who want to use Ar-Rahnu scheme to obtain financial resources to meet their daily financial requirements; and secondly, it can be a credit channel to those who requires temporary working capital, particularly for small business. The objective of Ar-Rahnu is to create an alternative financing channel to the conventional pawn broking, that is not only more transparent but it also more compliant with...
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...CHAPTER 1 INTRODUCTION 1.0 INTRODUCTION This chapter discusses on the introduction of this study. This includes the background 0f the study, background of the Bank Rakyat, problem statement, objectives of the study, research questions, and significance of the study. This chapter also discusses on scope and limitations of study and definition of term. 1.1 BACKGROUND OF THE STUDY For the past few years, a pawn broking has taken place in our country. It has been started since the 15th century which was introduced by the Chinese traders during the Malacca Sultanate. Then, it continued to expand after the discovery of tin mining in Larut in the 19 century. Pawn broking can be traced back to at least 3,000 years in ancient China. It also has been found in the earliest written histories of Greek and Roman civilizations. According to the Islamic Financial Services Board (IFSB), the Ar- Rahnu scheme can demonstrate its roles as a viable microcredit product of the financial institution in meeting the different customer requirements. Firstly, it represents a credit channel to those who want to use Ar-Rahnu scheme to obtain financial resources to meet their daily financial requirements; and secondly, it can be a credit channel to those who requires temporary working capital, particularly for small business. The objective of Ar-Rahnu is to create an alternative financing channel to the conventional pawn broking, that is not only more transparent but it also more compliant with...
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...Old Phones are the new Gold Mines With new chemical methods, more precious gold can now be selectively extracted from old electronics. The study was recently published on Angewandte Chemie journal by German Chemical Society. Figure 1: A substantial amount of gold obtained from recycling old phones and other electonics [Credit: http://nokiarevolution.com] With rapid revolutions in technology in this digital age, people are quick to change their phones to the latest handsets. But few people realise that recycling their old phones is imperative, and the shocking potential benefits it may bring. A recent study has found a surprising new way to extract the maximum amount of gold from old Waste Electrical and Electronic Equipment (WEEE)---using...
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...FIN 3103 FINANCIAL MARKETS AND INSTITUTIONS– SECTION 1A AN INTRODUCTION TO THE ASIAN EQUITY MARKET & ITS EXCHANGES SAMUEL TOW WEE YAP (A0102724U) LIEW KUANG CHEN JOEL (A0004624U) ANG CHUAN HWEN JEREMY (A0080928X) LIAW YIH HANG (A0091535E) WU GUIYAN (A0100395N) ZHAO CHUANYI (A0105563L) Contents 1. Introduction ..................................................................................................................................................................................................... 4 2. Objectives of the Stock Market ................................................................................................................................................................. 4 2.1 Capital Formation ......................................................................................................................................................................................... 4 2.2 Connecting Traders ...................................................................................................................................................................................... 4 2.3 Security............................................................................................................................................................................................................. 4 2.4 Economic Indicator ...................................................................................................
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