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...INVESTMENT PROJECT ASSIGNMENT THREE JIE LUO & WEIWEI HE OPTIONS (1) On April 18th we bought a call on 500 shares of Cisco Systems Inc (CSCO)with an expiration date of Nov. 16th, 2011, $16.00 strike price. (2) On April 18th we sold a put on 100 shares of Alpha Natural Resources Inc (ANR) with an expiration date of Nov. 21st, 2011, $52.5 strike price. (3) On April 18th we sold a call on 11 shares of Medtronic Inc (MDT) with an expiration date of Nov. 21st, 2011, $44 strike price. (4) On April 18th we bought a put on 21 shares of Gold Fields Ltd (GFI) with an expiration date of Nov. 21st, 2011, $17 strike price. (5) On April 18th we bought a long straddle on 100 shares of Microsoft Corp (MSFT) with an expiration date of Nov. 21st, 2011, $25 strike price. FUTURES On April 18th, we purchased 10 shares of Gold 6/11 as future contracts at $1491.8. We sold 10 shares of Gold 6/11 on April 21st at price $1506.8. Total earned from gold is $14,990. We chose to purchase gold is we believe that gold is increasing in a long run perspective. As a Chinese I notified that in Chinese stock market, there is a huge demand for gold. We expected there will be an inflation for gold market. Global excess liquidity for gold is a reason that we purchased gold in our project. The figure showed above is the activity we did on April 18th. Alpha Natural Resources Inc (ANR) sold a put because we think the price is the lowest and will not decrease anymore. Cisco...
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...accountants play a vital role in making key financial decisions that contribute to creating wealth for the shareholders. Methods such as budget forecasting and capital budgeting techniques are utilised and performed by accountants to determine which projects should be undertaken to maximise profits. They construct and provide the financial information necessary for directors to make an informed and calculated decision on where to invest the funds provided by shareholders. Companies have an endless life span and to simply focus on either short term or long term profits would be contrary to the interests of the company and its shareholders. Investors will react strongly to every investment and dividend decision by either increasing or decreasing the share price. A strong focus must therefore be given to every investment and dividend decision made by the company to continue to maintain the confidence of the real owners of the company. By making good financial decisions today and creating wealth for the shareholders, the company will have greater funds to make financial decisions in the future. Question A-2 Part A (i) Robert’s total life expectancy at his retirement age is 84 years (ii) The life...
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...Mudaraba-based Investment and Finance by A.L.M. Abdul Gafoor* In any economy, private investment occurs in two different ways: active investment, where one or more persons put their own capital into a project, manage it themselves and enjoy the fruits of their labour and capital themselves; and passive investment, where the investor provides the capital and receives a return but takes no further part in the project. Broadly speaking, a passive investor has three options: one, buy shares in a company and receive a dividend; two, buy bonds or securities and receive interest; three, deposit in a bank and receive interest. In an Islamic economy, active investment and the first option are permissible while the last two options would be regarded as riba (interest) income and therefore prohibited. On the entrepreneur side, he may finance his project using his own capital, by selling shares in his enterprise, or by borrowing on interest (from a bank or by issuing bonds/securities). In an Islamic setting, the first two methods are permissible while the last is not. For clarity the scenarios are depicted in Tables 1 and 2. Table 1. Investment options for capital-holders Type of investment Mode of investment Type of return on capital Islamic position Active investment In own enterprise Profit or loss from the enterprise Allowed Passive investment Shares in a company Dividend (profit or loss) from the company Allowed Bonds/securities Fixed positive return (riba)...
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...#BAY LEASING AND INVESTMENT LTD : Bay Leasing and Investment Ltd is looking for smart, energetic and result oriented personnel as Internal Audit Officer to expand its business and services. Bay Leasing & Investment Limited is one of the pioneer financial institutions in Bangladesh. Bachelor’s degree with CA course complete from any reputed Chartered Accountancy firm is needed to apply. Age limit is max 35 years. Applicants should have analytical skills, computer literacy, excellent communication skills both in English and Bengali. They must have 5 to 7 years work experience in similar work in Bank/NBFI. They should have knowledge on new counting techniques, financial policies etc. #GSP FINANCE CO. BANGLADESH LTD: Critical to achieving our objectives is to attract, retain and motivate the highest quality employees at all levels of the organization. We will invest in broad based skills development to deepen the human capital of the individual and hence the organization. Career mobility is also important and we intend to offer multiple and varied opportunities for the best performing staff to gain experience across a wide range of sectors. A defining characteristic of the HR policy of the company is that compensation levels are set on the basis of performance both at an individual and company level. A culture of meritocracy should be evident in the DNA of the company. Promotions will be determined by performance and not seniority or tenure. We are committed to career...
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...FIN10708 Finance and Investment for Business Topic 7 Tutorial Questions 1. Problem 8, p. 383 of the textbook = on excel document 2. Problem 9, p. 383 of the textbook. 0.72 x 0.1062+0.32 +0.15652+2.07 x 0.3 x 0.48 x 0.06 x 00.185 then square root 3. Using information in Questions 1 and 2 above: (a) Calculate the portfolio’s returns in each of the years 2007 through to 2012 (b) Calculate the portfolio’s average annual return (c) Calculate the portfolio’s standard deviation using your results from (a) and (b) and check that this standard deviation equals the one you calculate in Question 2 above. 4. Problem 16, p. 384 of the textbook. 5. A market analyst predicts that the expected return on the All Ordinaries Share Price Index will fall by 10% this year. Telstra has a beta of 0.51 and BHP Billiton has a beta of 1.17. (a) What would you expect to happen this year to the return on an investment in (i) Telstra and (ii) BHP Billiton? (b) If you accept the analyst’s prediction, should your investment portfolio contain shares with mainly high value or low value betas? 6. Problem 21, p. 385 of the textbook. 7. Problem 22, p. 385 of the textbook. 8. Problem 28, p. 385 of the textbook. 9. Company A has a beta of 0.7 and Company B has a beta of 1.4. If the risk-free rate is 4% and the market risk premium is 7%, according to the CAPM what is the expected return on an equally weighted portfolio of A and B? Show how this can be calculated in two different ways...
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...Finance 202 Alex Low – Course Notes Chapter 10 – bond prices and yields 10.1 Bond Characteristics Bond: A security that obligates the issure to make specific payments to the holder over time. Face value/par value: The payment at which is made at maturity to the bond holder Coupon rate: A bonds annual interest payment per dollar of par value Zero coupon bonds: pays no coupons, sells at discount, provides only payment of par value at maturity. If a bond is purchased between coupon dates the buyer must pay the seller for accrued interest. [Formula] Corporate Bonds: like government bonds except issued by companies. Floating rate bonds: Coupon rates periodically reset according to specified market date. Preference Stock: Although strictly classified as equity, it is often included in fixed income universe. Preference stock often pay a fixed dividend. Other domestic issuers: there are other issuers of bonds. Local governments issue municipal bonds to finance local projects. International bonds: * Foreign bonds: issued by a borrower from a country other than the one in which the bond is sold. These are dominated in the currency of the market country. * Eurobonds: different as denominated in currency (usually of the issuing country) different than that of market. Inflation protected securities: face values change with changes in price level. There is a fixed coupon rate, the amount changes with principle. 10.2 Bond pricing:...
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...ROBERT GORDON BUSINESS SCHOOL Investment Appraisal for Zest Spa India A financial analysis 1411742 06.01.2015 Words: 2420 + 500 Appendix Table of contents 1. Company overview and appraisal ....................................................................................................... 1 2. Background .......................................................................................................................................... 1 2.1 Porter´s analysis ............................................................................................................................ 2 2.2. Indian government ....................................................................................................................... 2 3. Investment Thesis................................................................................................................................ 3 4. Valuation ............................................................................................................................................. 5 4.1 ARR ................................................................................................................................................ 6 4.2 IRR.................................................................................................................................................. 6 4.3 Limitations ...............................................................................................................
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...Global Financial Markets and Investments FM702 Individual Assignment Learning Outcomes This assignment aims at ensuring that the following learning outcomes are achieved: * Understand the various global financial markets available to business operations; * Appreciate the nature of financial instruments; * Understand the fundamental concepts of financial markets; * Know about the institutional framework in which securities are traded; * Explain and evaluate the conditions of the capital market; * Locate and extract data from a variety of sources and evaluate the reliability and credibility of both sources and data; * Analyze complex, incomplete or contradictory information and communicate the outcome effectively; * Examine problems and issues from a number of perspectives, challenge viewpoints, ideas and concepts, and make well reasoned judgments. * Extract, process and present data for a given purpose, using both qualitative and quantitative analysis; * Use word processing and spreadsheet packages; locate and extract information from the internet; * Act independently in setting personal objectives and in planning and undertaking tasks using effective time management; manage and reflect on own learning and performance; seek and make use of feedback. Policy notes 1. All work must adhere to the University regulations on ‘Cheating, Collusion and Plagiarism’ which are provided as an Appendix in...
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...Introduction: Efficient Market Hypothesis (EMH) implies markets to be rational, incorporating new information to reflect in stock prices rapidly, considering direction and size of the share price movement. Consequently, leaving no opportunities for investors to beat the market and acquire abnormal returns. Predictable information raises the stock prices prior to its occurrence, and rapidly adjusting at the event date. Addendum to EMH, Random Walk Theory proposes market prices abide no pressure from past-price movements thus pursue a random course, making impossible to forecast future-price movements as they are an independent of past-prices. Fama (1970) establish three-level grading system portraying degree of market efficiency, based on investment approach endowing abnormal returns: Market anomalies are inconsistent with EMH and a consequence of deviations and incomprehensible patterns in smooth running of stock markets. Anomalies are statistically considerable and additionally proffer investors with risk adjusted economic returns. Once documented and scrutinized in literature, anomalies tend to disappear, overturn, or attenuate; doubting their subsistence in past, as being statistical irregularity, or have been arbitraged away. This essay will begin by defining limitations of CAPM and introduce three-factor model. Additionally, it will discuss the fundamental anomalies (Value and Size effects), calendar anomalies (January, Weekend and Time-of-the-month effects) and Technical...
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...Victoria Park 82/3 Defries Avenue Zetland NSW, 2017 Valuation Report Property Overview This spacious apartment is located within the Form building in Victoria Park. The current rental price is $640 per week with $2,560 bond. This property is on level 1 of the building with an open plan living and dining area that flows effortlessly out onto the oversized balcony. The apartment includes two double sized bedrooms each with built-in wardrobes and main with en-suite, one separate study area, two bathrooms, luxurious gourmet kitchen equipped with stainless steel appliances and Caesar stone bench tops, internal laundry and single secure undercover car space. The Victoria Park is equipped with gym, swimming pool, spa, barbeque area, and excellent security system and identification locking system. In this report, we used three main valuation approaches from the views of developers, investors and owner-occupiers to value the property. Location and Transportation Surrounded by natural beauty, Zetland is the ideal location to make a home. Two of Sydney’s finest golf courses, The Australian Golf Club and Moore Park Golf Club are a mere pitching wedge away. Nearby, the Sydney Cricket Ground and The Sydney Football Stadium cater for spectator needs, and Randwick racecourse is just down the road when people are in the mood to step out in the season’s latest fashion, or to have flutter each way on the fillies. Zetland has many schools surrounded such as James Cahill Pre School...
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...FINANCIAL INSTITUTIONS IN PAKISTAN In financial economics, a financial institution acts as an agent that provides financial services for its clients. Financial institutions generally fall under financial regulation from a government authority. Types of Financial Institutions Common types of financial institutions in Pakistan include Banks, Investment Companies, Insurance Companies, Leasing Companies, Venture Capital & Discount Houses, Housing Finance Companies, and Mutual Funds. Bank A bank is a commercial or state institution that provides financial services, including issuing money in various forms, receiving deposits of money, lending money, and processing transactions and the creating of credit. Major players of the banking sector are categorized in the following heads: * Central Bank * Nationalized Scheduled Banks * De-Nationalized Scheduled Banks * Specialized Banks * Private Scheduled Banks * Foreign Banks * Investment Banks * Micro Finance Banks * Islamic Banks Central Bank A central bank, reserve bank or monetary authority, is an entity responsible for the monetary policy of its country or of a group of member states, such as the State Bank in Pakistan. Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loan interest rates, and acting as a "bailout" lender of last resort to the banking sector during times of financial...
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...Long-term Finance and Economic Growth Working Group on Long-term Finance The views expressed in this report are those of the Working Group on Long-term Finance and do not necessarily represent the views of the individual members of the Group of Thirty. ISBN 1-56708-160-6 Copies of this paper are available for $49 from: The Group of Thirty 1726 M Street, N.W., Suite 200 Washington, D.C. 20036 Tel.: (202) 331-2472 E-mail: info@group30.org; www.group30.org Long-term Finance and Economic Growth Published by Group of Thirty© Washington, D.C. 2013 Table of Contents Abbreviations ............................................................................................................................................................................... 5 Glossary .............................................................................................................................................................................................6 Foreword ..........................................................................................................................................................................................8 Acknowledgments ..................................................................................................................................................................10 Working Group on Long-term Finance ................................................................................................................
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...Mullens FIN/ 370 October 28, 2011 Ruth Smith Finance- "Is the study of how people and businesses evaluate investments and raise capital to fund them" (Titman, Martin & Keown, 2011, p. 4). "The science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities. Finance consists of financial systems, to include the public, private and government spaces, and the study of finance and financial instrument" (Investopedia, n.d., para. 1). "While finance is primarily about the management of money, a key component of finance is the management and interpretation of information" (Titman, Martin & Keown, 2011, p. 5). Finance role in finance is to help businesses understand how to make their money work for them and build on that. Also, how to protect their assets. Efficient market- "An investment theory that states it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. According to the EMH, stocks always trade at their fair value on stock exchanges, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices" ( Investopedia, n.d., para. 1). Stock markets are an example of an efficient market. The role of an efficient market is when investors have the most current information to make the best choice at the present to make investments. Primary market- "New securities are bought...
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...Sample Essay on FINANCE: How to calculate the return on an investment (ROI) Research Paper Example of Research Paper, Sample essay Without calculating the return on an investment (ROI) is not possible to realize any marketing activity and be sure not to loose capital investments. It is essential for making one’s marketing activity more effective and uniquely productive. ROI can be expressed for different time periods: one year, one month, one week, one day. This makes it a necessary objective analyst of the marketing activity even for a long period. It also includes possible fees and expenses of the future financial project. When a person realizes an investment there is always a potential to increase the capital in several ways. There are a lot of formulas made to calculate ROI. Some of them are more detailed, some are less. It is obvious that the formula required depends on the type of investment and that ROI does not yield to formalization and cannot be entirely universal. Nevertheless, a general formula can be given: The Return on an Investment (ROI) Calculation ROI= Profit/ Total investment Total investment - total investment, including all the possible fees and expenses connected with the investment. For example, if you bought $8700 worth of stock and your fees were $1300, then your total investment is $10,000 ($8700 + $1300). Profit - profit or loss associated with the investment. For example if the $10,000 investment in stocks is worth $50,000 one year later, then...
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