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Using Financial Derivatives to Hedge Against Market
Using Financial Derivatives to Hedge Against Market

... They offer a financial payoff in case of particular events on the markets (e.g. a slump in stock price). This payoff can be used to soften the pain of a financial damage that comes along with such events. Hence, the two IT outsourcing partners could consider hedging the respective risk in their proj ...
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... IFRS 11 replaces IAS 31 Interests in Joint Ventures, and the guidance contained in a related interpretation, SIC-13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers, has been incorporated in IAS 28 (as revised in 2011). IFRS 11 deals with how a joint arrangement of which two or ...
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otc derivatives: salient practices and developments

... Exchange-traded derivatives products are standardised products with very limited variations. An OTC transaction, on the other hand, is a privately negotiated contract on whatever terms the parties agree. Although the OTC derivatives market is not yet subject to ad hoc regulation, a certain element o ...
THE CHINESE EQUITY MARKET An Economic Inquiry into Investment Opportunities and Risks
THE CHINESE EQUITY MARKET An Economic Inquiry into Investment Opportunities and Risks

... the reader or a third party may incur from their future investments in China. Nor can the authors be sued, summoned before a court of law or held liable in any possible manner. This disclaimer comes into force, should any individual or legal entity refer to our thesis as a basis for their investment ...
VIOLATION OF THE IID-NORMAL ASSUMPTION
VIOLATION OF THE IID-NORMAL ASSUMPTION

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Incentive Compensation – The White Swan in Risk Management

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structured life insurance and investment products for retail investors
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Fair Value Accounting: Information or Confusion for Financial Markets?
Fair Value Accounting: Information or Confusion for Financial Markets?

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... future is a decreasing function of the death rate. There is no utility from leisure. Labor supply of the individual is therefore inelastic and normalized to one unit of labor per year. For analytical convenience, we let () = ln  The market environment Since every individual faces an uncertain le ...
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Chapter 27 Risk Management and Financial Engineering

... If a change in the level of interest rates will adversely affect the cash flows of a company (perhaps by raising its cost of borrowing), that firm is exposed to interest rate risk. This is the single most common concern among managers engaged in risk management. Interest rate risk is the risk of suffe ...
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Financial Crises, Risk Premia, and the Term Structure of Risky Assets

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... contrast, this paper investigates short-term reactions in risk aversion functions and pricing kernels to significant exogenous events by developing an event study approach allowing us to present graphical and statistical evidence. Our paper further differentiates itself from the literature in its f ...
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Research Intensity and Financial Analysts Earnings Forecast

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Demography and the Long-Run Predictability of the Stock Market

... cohorts are deterministically followed by small cohorts in a recurring cycle, as has been the case for the past century in the United States, rather than a stochastic birth model in which a large cohort might be followed by an even larger cohort. Second, we assume preferences for which saving is rel ...
Determinants of Financial Leverage in Indian Pharmaceutical Industry
Determinants of Financial Leverage in Indian Pharmaceutical Industry

... Modigliani­ Miller (1958) found that the market value of a firm is affected by the structure of  its debts. l MM (1969) found that in the presence of corporate income tax but in the absence  of  bankruptcy  risk,  there  is  a  linear  relationship  between  the  value  of  levered  firm  and  of  i ...
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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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