...work for a large investment firm and recently wrote a position article on your firm's approach to investing for the small investor, titled "Investing Is for the Little Guy." The article now appears on your company's Web site. It has, interestingly enough, generated e-mail responses from potential clients, and your firm is asking you to address some of their questions for a Frequently Asked Questions (FAQ) segment that will be posted to the Web site soon. Specifically, some of the respondents have compared investing in the stock market as a no-win situation, and only the institutional investors can win. These respondents would like a response that further clarifies your firm's position regarding risk in light of these types of statements. Research stock market investments using your text, course materials, and Web resources. What disadvantages do small investors face when investing in the stock market? What advantages are presented to these small investors? Post a new topic to the Discussion Board that contains your answers to the above questions. Respond to 2 other students' posts on the Discussion Board that critiques their answers. I work for a large investment firm and recently wrote a position article on the firm's approach to investing for small investors. It has generated e-mail responses from potential clients and my firm is asking me to address some of their questions. Some of the respondents have compared investing in the stock market as a no-win situation...
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...Review of Development Economics, 9(2), 166–176, 2005 Endogenous Growth Models and Stock Market Development: Evidence from Four Countries Guglielmo Maria Caporale, Peter Howells, and Alaa M. Soliman* Abstract This paper re-examines the relationship between stock market development and economic growth. It provides a theoretical basis for establishing the channel through which stock markets affect economic growth in the long run. It examines the hypothesis of endogenous growth models that financial development causes higher growth through its influence on the level of investment and its productivity. The empirical part of this study exploits techniques recently developed to test for causality in VARs. The evidence obtained from a sample of four countries suggests that investment productivity is the channel through which stock market development enhances the growth rate in the long run. 1. Introduction Several theoretical and empirical papers such as Levine (1991), Levine and Zervos (1995), Demirguc-Kunt (1994), Demirguc-Kunt and Levine (1995), Rousseau and Wachtel (2000) and Beck and Levine (2003), have suggested that stock market development affects economic growth in developing countries. The common problem with these studies, however, is that there is no discussion of the channels through which stock markets can stimulate economic growth. In traditional growth theory, the growth rate is a positive function of exogenous technical progress. However, financial development...
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...for any manager in the mutual-fund industry. By the middle of 2005, Value Trust is worth $11.2-billion. Bill Miller’s approach to investment management was research-intensive and highly concentrated. For instance, nearly 50 percent of Value Trust’s assets were invested in just 10 large-capitalization companies. While most of Bill Miller’s investments were value stocks, he was not averse to taking large positions in the stocks of growth companies. In other words, Bill Miller’s investing style is iconoclastic: “You simply can’t do what he’s done in the supremely competitive, ultra-efficient world of stock picking by following the pack…The fact is that Miller has spent decades studying freethinking overachievers, and along the way he’s become one himself.” Mutual Funds Definition A mutual fund is an investment vehicle that pooled the funds of individual investors to buy a portfolio of securities, stocks, bonds, and money-market instruments to meet specific investment objectives; investors owned a pro rata share of the overall investment portfolio (Bruner, 2007). The various investments included in a fund’s portfolio are handled by professional money managers in line with the stated investment policy of the fund. All mutual funds have a portfolio manager, or investment advisor, who directs the fund’s investments according to explicit investment objectives. Mutual Fund Types Investors have different objectives, so various types of mutual funds are needed to help them achieve...
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...vs Secondary Market The primary market is direct from the company issuing the stock or bond to the buyer. The secondary market is after the initial public offering, people buy and sell on the stock exchange, NASDAQ or over the counter market or the pink sheets. For example, IBM issues some new stock. Someone buys it (usually an underwriter, but maybe the public). Assuming IBM sells direct to the public and I buy it for $50 and it goes up to $ 60 and you want to buy it and I want to sell it. So I sell through a broker and you buy through a broker which represents a sale in the secondary market. The word "market" can have many different meanings, but it is used most often as a catch-all term to denote both the primary market and the secondary market. In fact, "primary market" and "secondary market" are both distinct terms; the primary market refers to the market where securities are created, while the secondary market is one in which they are traded among investors. Knowing the functions of the primary and secondary markets is key to understanding how stocks trade. Without them, the stock market would be much harder to navigate and much less profitable. We'll help you understand how these markets work and how they relate to individual investors. Primary Market The primary market is where securities are created. It's in this market that firms sell (float) new stocks and bonds to the public for the first time. For our purposes, you can think of the primary market as being synonymous...
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...CHAPTER 13 REPORTING AND ANALYZING INVESTMENTS Summary of Questions by Objectives and Bloom’s Taxonomy Item | SO | BT | Item | SO | BT | Item | SO | BT | Item | SO | BT | Item | SO | BT | True-False Statements | 1. | 1 | K | 8. | 3 | C | 15. | 4 | C | 22. | 5 | C | 29. | 4 | | 2. | 1 | C | 9. | 3 | C | 16. | 4 | K | 23. | 6 | K | 30. | 5 | | 3. | 2 | K | 10. | 3 | K | 17. | 5 | C | 24. | 6 | K | 31. | 6 | | 4. | 2 | C | 11. | 3 | C | 18. | 5 | K | 25. | 6 | C | | | | 5. | 2 | C | 12. | 3 | K | 19. | 5 | K | 26. | 1 | | | | | 6. | 2 | C | 13. | 3 | K | 20. | 5 | C | 27. | 2 | | | | | 7. | 2 | K | 14. | 4 | K | 21. | 5 | K | 28. | 3 | | | | | Multiple Choice Questions | 32. | 1 | K | 47. | 3 | K | 62. | 3 | K | 77. | 4 | C | 92. | 6 | C | 33. | 1 | K | 48. | 3 | K | 63. | 3 | K | 78. | 5 | K | 93. | 6 | K | 34. | 1 | K | 49. | 3 | AP | 64. | 3 | K | 79. | 5 | K | 94. | 6 | C | 35. | 1 | K | 50. | 3 | AP | 65. | 3 | K | 80. | 5 | K | 95. | 1 | C | 36. | 1 | K | 51. | 3 | K | 66. | 3 | K | 81. | 5 | C | 96. | 2 | AN | 37. | 2 | K | 52. | 3 | K | 67. | 3 | K | 82. | 5 | K | 97. | 2 | C | 38. | 2 | C | 53. | 3 | C | 68. | 3 | C | 83. | 5 | K | 98. | 3 | AN | 39. | 2 | AP | 54. | 3 | C | 69. | 3 | C | 84. | 5 | K | 99. | 3 | AP | 40. | 2 | AN | 55. | 3 | K | 70. | 3 | C | 85. | 5 | AP | 100. | 3 | AP...
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...Perezes’ Good Fortune Wynetta Tucker BUS 655 Financial Investment Management Professor Milan Havel Ashford University 3 Jun 13 Perezes’ Good Fortune In meeting the needs of an individual with regard to their investment needs, it’s important that the source of information offers credible information. The wall street journal has been a very important and credible source of financial and investment information. The ‘markets’ segment of the journal offers credible market information that can be helpful to any new investor. For instance, the wall street journal on Third June 2013, provided information regarding the share prices of various stocks listed in the various stock exchanges in London, Nasdaq as well as New York stock exchanges. This information is helpful to Angel as she is able to make informed decisions regarding her investment. Other general sources of financial and investment decisions would be consulting investment consultants, reading business news in various investment magazines and lastly, she would be able to get information from appointed stock dealers or business news segment of telecasts Standard and Poor’s, an American financial services company publishes financial research and analysis of stocks as well as bonds. It’s a member of the Mc Graw Hill companies and measures stocks indices as well as making an analysis of various stocks. Using this company, Angel is able to get information relating to the various companies in the portfolio...
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...the philosophy of DFA. What sort of market behavior are they counting on? * DFA believes in three principles: 1. The Efficient Market Theory. That is, the stock market is efficient and no one has the ability to consistently pick stocks that will beat the market. Over any given period, some lucky investors will outperform the market while others will underperform. DFA felt that the market price of any firm’s stock incorporated all public information and therefore did not do any fundamental analysis on the firm in question. 2. The value of sound academic research. For example, DFA’s founders believed that small-stock investing could yield high returns to investors. They formulated this belief on the Ph.D. dissertation research of Rolf Banz of the University of Chicago, which showed that small stocks had consistently outperformed large stocks between 1926 and the late 1970s. 3. The ability of skilled traders to contribute to a fund’s profits even when the investment is inherently passive. DFA’s investment fund had a semi-active strategy between those of actively managed funds and those of pure index funds. * DFA counts on market behavior that reflects the following concepts: 1. The Beta is Dead. Stocks with high-beta do not have consistently higher returns than low-beta stocks. That is, greater risk does not guarantee greater reward. 2. The Size Effect (Small Minus Big). Based on the research that small stocks historically outperform large ones, DFA...
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...SUMMER TRAINING REPORT ON INVESTMENT STRATEGY OF INVESTOR IN STOCK MARKET AT Submitted in partial fulfillment of the requirements of Post Graduate Diploma in Business Management Under the guidance of Faculty guide Company guide Miss. Sudhi Sharma Mr. Prabhpreet Singh Submitted By: Priyanka Singh PGDM III SEM (2010-2012) Roll No. -1370 Dr. Gaur Hari Singhania Institute of Management Research Jaykaylon Colony, Kamla Nagar, Kanpur-208005 ACKNOWLEDGEMENT I would like to express my gratitude to all those who gave me the possibility to complete this project. I would like to thank my college authorities for providing me the opportunity to work with one of the most prestigious organization. I want to thank the Head of training department Prof. Sunil Gupta for giving me permission to commence this project in first instance, to do necessary research work. I would like to extend my thanks to Kotak Securities Ltd for granting me this project. My sincere thanks to Mr. Prabhpreet Singh, Branch Manager, Kotak Securities Ltd, Kanpur for his valuable suggestions and who has been a great source of inspiration for me to work hard with sincerity. I would also like to thank Miss. Saumya...
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...Department of Finance Faculty of Business Studies University of Dhaka TITLE OF THE STUDY: BANGLADESH STOCK MARKET PROBLEMS AND PROSPECTS Course Title: Course Code: Submitted to Department of Finance University of Dhaka Submitted by Section “A” BBA 16th Batch Department of Finance University of Dhaka Date of Submission: ------------------------------------------------- about us… Sl No. | Name | Id | 1 | | | 2 | | | 3 | | | 4 | | | 5 | | | 6 | | | 7 | Md. Sanowar Hossain | 16-175 | 8 | | | 9 | Md. Mahbubur Rahman Khan | 16-263 | TABLE OF CONTENTS Topic Page No. Introduction 7 – 8 Stock & how it can be Traded 7 Stock Exchange 7 Broker 7 Listed and Unlisted Company 7 SEC 8 Important Definitions & Terminologies 8 – 10 Face Value, Market Value 8 Market Lot 8 EPS 8 Price Earning Ratio 9 Dividend, Stock Dividend 9 Right Issue 9 Dividend Yield 9 Circuit Breaker, LTP 10 Volume 10 High Price, Low Price 10 Trade 10 52 Weeks Range 10 IPO 10 Stock Placement & Market Analyses 10 – 11 Private Placement 10 Technical Analysis 11 Fundamental Analysis...
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...An Assignment on Investment Management [FIN 364] Capital Market of Bangladesh Submitted to: Farhana Rahman Lecturer, School of Business UITS Submitted by: Shakerul Islam Tazu ID. 09510127 Eamin Zabed ID. 09510082 Farhana Yeasmin Lopa ID. 09510189 Rawnak Razzak ID. 08310026 UNIVERSITY Of Information Technology & Sciences Baridhara, Dhaka ------------------------------------------------- LETTER OF TRANSMITTAL December 18, 2010 Ms. Farhana Rahman Faculty of Business Administration School of Business UITS Subject: Submission of the Assignment on “Capital Market of Bangladesh”. Dear Madam, It is a great pleasure for us that we have the opportunity to submit the assignment on “Capital Market of Bangladesh”. We have tried our level best to put meticulous effort for prepare this assignment. Any shortcomings or fault may arise as our unintentional mistakes. We will wholeheartedly welcome any clarification and suggestion about any view and conception disseminated through this assignment. Thank you. Yours Sincerely, Shakerul Islam Tazu ID. 09510127 Eamin Zabed ID. 09510082 Farhana Yeasmin Lopa ID. 09510189 Rawnak Razzak ID. 08310026 ------------------------------------------------- Aknowledgement One of the most pleasant parts of writing this report is the opportunity to thanks those who have contributed to it. Unfortunately, in any establishment, the list of expression of thanks- no matter how all-embracing-...
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...As you may already know, in spite of the recent descending economic spiral, the fast paced global marketplace faces considerable challenges in the areas saving, investing, and spending. Lately, the stock and bond markets have seen better days. The financial industry’s customers have lost faith and hope in its stability, and instead of looking up to large corporations many people are looking at them in expectation of scandal. Nevertheless, there are individual people, groups, and institutions that have hope that things will get better. They assist in building our nation’s economy by becoming better stewards of their home finances, taking risks in investing in businesses again, and promoting new businesses which can be seen in the primary market. Finance is understood to be the science of managing money and other assets such as investments and credit. Finance functions for everyone on personal levels, on organizational levels, on each national level, as well as the global level. Capital is a term heard primarily in business for the purpose of referencing goods and cash used to generate income. Capital represents the financial strength and net worth of an organization. An organization’s goal is to maintain capital. They know that they have been successful at maintaining it when their assets outweigh the liabilities. The more capital a business has, the less debt they incur. Debt happens when businesses and individuals owe goods, services, and money. It is an obligation...
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...Graduate Investments Fall 2014 Case Discussion Questions Instructor: Professor Edward H. Chow 周行一 Case study: financial bubble Case: Trouble with a bubble (9-808-067) 1. Why did Irving Fisher believe that stock prices had reached a permanently high plateau? 2. Why did the stock market crash in 1929? 3. Why did influential individuals like Fisher, Keynes and Rockefeller believe that the downturn would only be temporary? Case study: investment banking business and global financial crisis Case: Investment banking in 2008 (A): Rise and fall of the Bear (KEL378) 1. What role did Bear’s culture play in its positioning vis-à-vis its competitors, and what role might that culture have played in its demise? 2. How did Bear’s potential collapse differ from that of LTCM in the eyes of the Federal Reserve? 3. What would Bear have done differently to avoid its fate? A. - In the early 2000s? B. - During the summer of 2007? C. - During the week of March 10, 2008? 4. Who stood to benefit from Bear’s implosion? 5. Is market perception of liquidity more important for an investment bank than it is for an traditional manufacturing or distribution business? If so, why? 6. How could Bear have addressed perceptions of its liquidity? Could it have stopped the run on the bank, and if so, how? 7. Did Bear’s failure undermine the viability of so called “pure-play” investment banks? 8. What role should the Fed play in maintaining order in world securities markets? Case:...
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...Chapter 1 UNDERSTANDING INVESTMENTS Multiple Choice Questions Establishing a Framework for Investors 1. Which of the following is the best definition of wealth? a. the sum of all current and future income b. the total of all assets and all income c. the total of assets and income less any liabilities. d. the sum of current income and the present value of future income. (d, moderate) 2. Stocks and bonds would be classified as: a. real assets b. indirect assets c. personal assets d. financial assets (d, easy) 3. Technically, investments include: a. only financial assets. b. only marketable assets. c. financial and real assets that are marketable or non-marketable. d. only financial and real assets that are marketable. (c, easy) 4. The retirement plans that guarantee retirees a set amount of money each month are known as: a. 401(k) plans b. self-directed plans c. defined-benefit plans d. defined-contribution plans (c, moderate) The Importance of Studying Investments 5. The investment professionals that arrange the sale of new securities are called: a. arbitragers b. traders c. investment bankers d. specialists (c, moderate) 6. Another name for stockbrokers is: a. specialists ...
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...Morgan Stanley Emerging Markets Fund is a non-diversified, closed-end management investment company. The Fund's primary investment objective is to seek long-term capital appreciation. At least 65% of the Fund's total assets will be invested in emerging country equity securities: common and preferred stock, bonds, notes and debentures convertible into common or preferred stock, stock purchase warrants and rights, equity interests in trusts and partnerships as well as American, Global or other types of Depositary Receipts. The Fund may leverage up to 10% of its total assets. The Dow 30 company selected for this assignment is Caterpillar. As per the last annual report of the company, the major investment decisions of the company in the recent fiscal year include: The company heavily invested in expansion or growth plans for emerging markets such as India and China. In June 2008, as part of its strategic plan to increase its manufacturing footprint in the rapidly growing Asia-Pacific region, Caterpillar announced a four-year, $200 million investment to increase manufacturing capacity in India. In terms of investments, the company's investment portfolio comprises of government debt, corporate bonds and equity securities. Cat Insurance maintains a well-diversified equity portfolio consisting of three specific mandates: large cap value stocks, small and mid cap growth stocks and international growth and income stocks. The Morgan Stanley's emerging markets funds, as per the...
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...YMJ Investment – Final Project Throughout the semester we really had to watch the markets in order to obtain a successful portfolio. The way we approached this task was through constant watching of the securities market to find out current trends as well as picking up stocks we thought were undervalued at that time. The latter, of course, applies to our managed portfolio, where we were able to select stocks we deemed were good investments. We observed that this specific portfolio gave us more stable returns, which we attributed to the lower betas of these stocks. One can also conclude that the worst performers of the same portfolio were due the same cause. Based on the returns of our managed portfolio, one can conclude that we chose to take a safe approach and invest in stocks that had low, but steady returns and growths. At the end of the semester, our strategy proved to be successful based on our overall returns. On the other hand, our control portfolio, which takes a passive management approach, had a different outcome. In this type of management, it is imperative that one waits a longer period of time to receive the expected returns. However, we had surprising results as our stocks for this portfolio had large returns. We believe that this exceptional result was due our clever choice of industry. Also, the worst performers of this portfolio presented larger negative returns than we predicted. We also attribute these results to the betas of the stocks that were relatively...
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