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Chapter Two: LOW GROWTH, LOW INTEREST RATES, AND
Chapter Two: LOW GROWTH, LOW INTEREST RATES, AND

... or both. Instead, it considers a hypothetical equilibrium with low growth and low interest rates, where expected returns on most financial assets are low.4 The scenario should not be interpreted as a baseline or projection of most likely economic outcomes in the medium term, but as an exercise inten ...
Sustainable Withdrawal Rates From Your Retirement Portfolio
Sustainable Withdrawal Rates From Your Retirement Portfolio

... period prefers a 75% success rate or greater, he or she will limit the initial withdrawal rate to 5% and maintain a portfolio of at least 25% stock. A 6% withdrawal rate with a 100% stock portfolio has a 73% chance of success for a 20-year payout.. Recommended portfolio asset allocations often inclu ...
Risk Transformation Aligning risk and the pursuit of
Risk Transformation Aligning risk and the pursuit of

... Misalignment and gaps develop over time, sometimes over decades, as the organization diversifies its businesses, introduces new products and services, and responds to new laws and regulations. Some business units come to see the risk management function as being responsible for managing risk while t ...
Managing the consequences of macroeconomic and (geo
Managing the consequences of macroeconomic and (geo

... It does not like to make bets (such as insuring Michael Jackson’s last tour, for example). The probability distribution can be observed, inferred or modelled. Scenarios represent a way to infer probability distributions, even when historical data is scarce or not available. Emerging risks, such as c ...
Evaluating the Riskiness of Initial Public Offerings: 1980-2000
Evaluating the Riskiness of Initial Public Offerings: 1980-2000

... the aftermarket. This type of issuer-underwriter adverse selection might not make sense in normal economic circumstances where sophisticated and better-informed advisors can easily judge the quality of the firm. In a more speculative or “irrational” market environment, however, such as the Internet ...
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Introduction Financial literacy education has been introduced to high

... schoolteachers, the Citi-NIE FinLit Pedagogy Workshops for teachers and the research that the hub will embark on. The training programme is divided into two parts: personal development in personal finance skills and pedagogical training for financial literacy teaching. Citi-NIE FinLit Personal Finan ...
application of the countercyclical capital buffer in lithuania
application of the countercyclical capital buffer in lithuania

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Coherent Measures of Risk

... We give conditions for extending into a coherent risk measure a measurement already agreed upon for a restricted class of risks (Section 4.2). We use the representation results to suggest a specific coherent measure (Section 5.1) called tail conditional expectation, as well as to give an example of ...
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... consume a burst of wealth at high marginal utility, which necessitates a rapid sale of securities. As a result of this urgency, liquidity-event consumption must be financed by sales of liquid securities, namely those that can be traded quickly and in large quantities at low cost.2 We endogenize liqu ...
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Spillover Effect of US Quantitative Easing From the

... realm has shown us that the world was smaller than we thought. In this respect, the financial crisis of 2008 started in the United States catalysed world media’s attention, as the crisis became global in a record time. Due to the leading position of the USA, the exceptional monetary measures taken b ...
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View PDF - CiteSeerX

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Auditing complex financial instruments

... The opportunity has also been taken to align the guidance in PN 23 with the APB’s International Standards on Auditing (ISAs) (UK and Ireland). The APB develops guidance in Practice Notes to assist auditors apply ISAs (UK and Ireland) and to indicate best practice in other areas; Practice Notes refle ...
A big leap forward
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Chapter 6: Bond Primer
Chapter 6: Bond Primer

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Does Easing Monetary Policy Increase Financial Instability?
Does Easing Monetary Policy Increase Financial Instability?

... For instance, monetary policy can affect financial stability: investors may be induced to substitute low-yielding, safe assets for higher-yielding, riskier assets (Rajan, 2005, Dell’Ariccia, Laeven, and Marquez, 2011); investors may also be encouraged to take greater risks if they perceive that mone ...
Working Paper No. 510 Institutional investor
Working Paper No. 510 Institutional investor

... the same time, allowing for the influence of other factors that may have been influenced by QE (eg domestic financial conditions), may lead to underestimating the potential effects of the policy. We therefore follow Pesaran and Smith (2012) in allowing only for factors that influence portfolio alloc ...
Effects of Business Diversification on Asset Risk-Taking
Effects of Business Diversification on Asset Risk-Taking

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NBER WORKING PAPER SERIES DO FIRMS IN COUNTRIES WITH POOR PROTECTION

... actions of firms and individuals. Recent papers examine how dividend, investment, asset composition, and capital structure policies are related to the quality of institutions.2 In this paper, we focus more directly on why firm policies depend on the quality of institutions. The quality of institutio ...
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... Equity strategies may be subject to one or more of the following material risks: Equity Investing Risk; Foreign and Emerging Market Investment Risk; Risks Associated with Active Management; General Investing Risks; Small Companies Risk; Real Estate Risk; Derivatives Risk; Income Risk; Concentration ...
Corporation Tax treatment of interest-free loans and other
Corporation Tax treatment of interest-free loans and other

... lower amount (or no amount at all) for periods in which the arm’s length provision is required to be applied. Note that the accounting analysis under New UK GAAP may be different to the transfer pricing analysis. The accounting analysis does not take into account what amount the company could or wou ...
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Annual Report - Wilson Asset Management

... investment portfolio performance is the growth in the underlying portfolio of equities and cash before costs. A key objective of WAM Capital is to grow the investment portfolio at a greater rate than the S&P/ASX All Ordinaries Accumulation Index, which is called outperformance. NTA growth is the cha ...
IOSR Journal of Economics and Finance (IOSR-JEF)
IOSR Journal of Economics and Finance (IOSR-JEF)

... Only demand deposits are guaranteed. Meanwhile, investment deposits are placed on profit-and-loss sharing basis. When such bank faces macroeconomic or specific crises, investment depositors automatically share the risk. The bank is less likely to fall and a bank run is less probable. It can therefor ...
Open-Market Operations in a Model of Regulated
Open-Market Operations in a Model of Regulated

... the liabilities of these bond funds and increases the amount of currency held by the public. Under the assumption that central bank resource costs are independent of its portfolio, the only effect is to free some resources; less resources are used in intermediation. Hence, our conclusion: The open-m ...
Asset Management Fees and the Growth of Finance
Asset Management Fees and the Growth of Finance

... holds all the funds in some, usually broad, stock-market index) was established by the Vanguard Group of Investment Companies in the late 1970s. While competition in the actively managed segment of the mutual fund market has primarily taken the form of product differentiation, the generic index fund ...
Fill-up on knowledge - db-X markets
Fill-up on knowledge - db-X markets

... Playing the stock exchange Since acquiring your petrol options, you have developed a keener interest in petrol price trends and their influences. One day, you read an interesting newspaper article about Deutsche Automobil AG. The carmaker is about to bring out an attractive, high-performance car tha ...
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Financial economics

Financial economics is the branch of economics characterized by a ""concentration on monetary activities"", in which ""money of one type or another is likely to appear on both sides of a trade"". Its concern is thus the interrelation of financial variables, such as prices, interest rates and shares, as opposed to those concerning the real economy. It has two main areas of focus: asset pricing (or ""investment theory"") and corporate finance; the first being the perspective of providers of capital and the second of users of capital.The subject is concerned with ""the allocation and deployment of economic resources, both spatially and across time, in an uncertain environment"". It therefore centers on decision making under uncertainty in the context of the financial markets, and the resultant economic and financial models and principles, and is concerned with deriving testable or policy implications from acceptable assumptions. It is built on the foundations of microeconomics and decision theory.Financial econometrics is the branch of financial economics that uses econometric techniques to parameterise these relationships. Mathematical finance is related in that it will derive and extend the mathematical or numerical models suggested by financial economics. Note though that the emphasis there is mathematical consistency, as opposed to compatibility with economic theory.Financial economics is usually taught at the postgraduate level; see Master of Financial Economics. Recently, specialist undergraduate degrees are offered in the discipline.Note that this article provides an overview and survey of the field: for derivations and more technical discussion, see the specific articles linked.
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