...The way to fruitful long haul contributing is the conservation of capital. Warren Buffett, ostensibly the world's most excellent mogul, has one standard when contributing - never lose cash. This doesn't mean you ought to offer your venture property the minute they enter losing region, yet you ought to remain definitely mindful of your portfolio and the losses you're ready to persevere in an exertion to expand your riches. While it is difficult to stay away from danger completely when putting resources into the business sectors, these five strategies can help protect your portfolio. One of the foundations of Modern Portfolio Theory (MPT) is diversification. In a business downturn, MPT pupils accept a generally expanded portfolio will beat a thought one. Speculators make deeper and all the more extensively broadened portfolios by owning countless in more than one asset class, along these lines decreasing unsystematic danger. This is the hazard that accompanies putting resources into a specific organization instead of deliberate danger, which is the danger connected with putting resources into the businesses by and large. As per some money related specialists, stock portfolios that incorporate 12, 18 or even 30 stocks can take out most, if not all, unsystematic danger. Shockingly, methodical danger is constantly present and can't be differentiated away. On the other hand, by including non-associating asset classes, for example, securities, items, monetary standards...
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...d) How much will Eastbridge receive (in US$) if the share price of Cambridge is £7.50 and the spot rate is US$1.60 in one month time? e) What will happen if in one month time, share price of Cambridge drop to £5.00 and Eastbridge decided to hold on to the shares and sell at a later date when the share price is more favourable? Assume that the spot rate in one month time is US$1.68. Question 2 What types of risk are present in a portfolio? Which type of risk remains after the portfolio has been diversified? Question 3 How, according to portfolio theory is the risk of the portfolio measured exactly? Question 4 Discuss about the integration of market worldwide and its impact on international portfolio diversification. Question 5 Giri Lyer is a European analyst and strategist for Tristar Funds, a New York-based mutual fund company. Giri is currently evaluating the recent performance of shares in Pacific Wietz, a publicly traded specialty chemical company in Germany listed on the...
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...that Dyer has been targeting. Dyer wants to grow his business enough to reach his strategic goal of building a sports complex for his business to occupy. Dyer needs to double his business in order to support this goal. In using S.W.O.T. analysis to evaluate NOCO’s current situation it is clear that NOCO has a number of things working for it already; customer retention is very high, awareness of NOCO in its’ current market is close to 100 percent and Dyer has access to enough trainer resources to continue his company’s growth. Some of the obstacles NOCO faces in working toward expansion are loss of customer base to high school sports programs after they reach 14 years old, a narrow selection of programs for current customers, lack of diversification and limited awareness of the company’s programs and philosophy in adjacent towns. Dyer could employ many operational strategies help reach his ultimate goal of a new sports complex. There are several opportunities available for NOCO to take advantage of with minimal threat or competition to worry about. Dyer has noticed that as the kids in his programs begin high school and start to participate in school sports, they tend to lose interest in the soccer programs he offers. Dyer might try product development by offering camps and training programs for the older students outside of their school and school sport schedules. Summer camps geared toward a general sport theme as opposed to just soccer might appeal to the older kids that are...
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...Diversification of Income Resource in Saudi Arabia as Result Decrease Oil Price Names Institutional Affiliation Abstract The main objective of this paper is to study the idea of diversification of the income resource of Saudi Arabia due to the effects of the instability in the oil market. Saudi Arabia as a country has developed due to its oil source which makes it the kingpin in the world oil market. Approximately 85% of the country revenue is earned from the oil economic sector. This is a sign of over reliance on the oil market making the country economy vulnerable because of changes of oil prices. The instability of the oil prices in the global market has signaled the need for economic diversification to build a stable economy (Shoult, 2006). This paper discusses the possible ideas which can be used to up bring diversified economy which does not depend on a single or few sectors of income generation. Introduction Saudi Arabia is a country that is located in the western part of Asia. It is the world largest producer and exporter of petroleum products. The economy of Saudi Arabia has in the past been pivoted on the oil as source of revenue due to the fact that the strength of the economy, foreign investor’s ideas and development of the infrastructures were all dependent on the oil. Fluctuations in the oil prices and demand in the world market has greatly affected the economy of Saudi Arabia and well as a source of livelihood to the majority of the citizens. The country...
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...Assessment of the eight major elements of Buffet's investment philosophy: 1 Economic reality, not accounting reality. Analysis: One tends to agree with Buffett on this philosophy. Accounting is a product of many estimates and judgments. It is essentially a rear-view mirror, looking back at what has happened. To add to the problem the view changes with each new accounting period. In contrast the economic reality is the view through the windshield at what lies ahead. It consists of intellectual property, creativity, know-how and the network of production and distribution systems. The brands and trademarks of a business are the symbols of the economic reality – symbols that indicate the reputation of the company. The economic reality changes much more slowly than the accounting reality as it is dependent on the response of the markets to new products and services that the company has to offer or to any substantive changes - up or down - in corporate reputation. 2. The cost of the lost opportunity. Analysis: Here Buffett is building on the economic principle of the efficient use of scarce resources where the notion of opportunity cost plays a crucial part in ensuring that resources are being used efficiently. The true cost of an investment is what you give up (opportunity) to get it. This includes not only the money spent in buying that asset but also the economic benefits that one has to do without because one bought that particular asset and thus can...
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...is more likely to apply for insurance than a low-risk person is. Moral hazard occurs because people have less incentive to be careful about their risky behavior after they purchase insurance. Gregory, M. (2012). The Basic Tools of Finance. Principles of Economics (7 ed., pp. 573-574). Stanford: Cengage Learning. 2. What is diversification? Does a stockholder get a greater benefit from diversification going from 1 to 10 stocks or going from 100 to 120 stocks? Diversification is the reduction of risk achieved by replacing a single risk with a large number of smaller unrelated risks. A stockholder will get more diversification going from 1 to 10 stocks than from 100 to 120 stocks. Gregory, M. (2012). The Basic Tools of Finance. Principles of Economics (7 ed., pp. 574-575). Stanford: Cengage Learning. 3. Comparing stocks and government bonds, which type of asset has more risk? Which pays a higher average return? Stocks have more risk because their value depends on the future value of the firm. So in return it will always have a higher risk; Stocks will have a higher return with the average of 8 percent a year and bond an average of 3 percent a year. Gregory, M. (2012). The Basic Tools of Finance. Principles of Economics (7 ed., pp. 575-576). Stanford: Cengage Learning 4. Is unemployment typically short term or long term? Explain. Unemployment is typically short term. Most Individuals who become unemployed are able to find them new jobs pretty quickly. Gregory, M....
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...Journal of Multinational Financial Management 11 (2001) 17 – 37 www.elsevier.com/locate/econbase Diversification strategy and capital structure of multinational corporations Imed Eddine Chkir a,1, Jean-Claude Cosset b,* Faculty of administration, Uni6ersity of Ottawa, 136 Jean-Jacques Lussier Street, Ottawa, Ont., Canada K1N 6N5 b Departement de finance et assurance, Faculte des sciences de l’administration, Uni6ersite La6al, ´ ´ ´ Quebec, P.Q., Canada G1K7P4 ´ Received 3 April 1999; accepted 22 October 1999 a Abstract This study examines the relationship between the capital structure of multinational corporations (MNCs) and their diversification strategy. Both the international market (multi-country operations) and the product (multi-industry operations) dimension of diversification are integrated into the analysis and a switching of regression regimes methodology is employed that accounts for the bi-dimensional nature of the diversification strategy pursued by MNCs. The model identifies four types of diversification regimes. The results suggest that leverage increases with both international and product diversification. It is also found that the combination of both types of diversification leads to lower levels of bankruptcy risk. Although the role of the determinants of MNC capital structure varies with the diversification strategy, there seem to be common determinants. In particular, profitability and bankruptcy risks are negatively related to the debt ratio of MNCs. © 2001 Elsevier...
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...Course Code : ITB 301 Course : International Business Section : 03 Submitted to : Md. Gazi Salah Uddin Senior Lecturer East West University OTOBI FURNITURE: OPPORTUNITY, BARRIERS & POSSIBILITY OF EXPORT DIVERSIFICATION Submitted by Anisur Rahman 2004-2-14-059 Md. Raisul Islam 2006-1-10-015 Nusrat Nur 2006-1-10-037 Md. Atiqul Alam 2007-1-10-101 Date of Submission: 09 April 2009 Md. Gazi Salah Uddin Senior Lecturer East West University Dear Sir, In compliance with your advice for preparing a report on OTOBI FURNITURE we’ve tried our best to carry out what you really wanted. While preparing the report, we have followed standard methodology to take out findings and real condition. As per the direction of you, we have tried our best to highlight the findings, opportunities and problems through applying our acquired knowledge by studying this course. We sincerely hope this report will fulfill the requirements suggested by you. We are happy to get this kind of report. If you need any kind of assistance in interpreting...
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...ARGUMENTS FOR AND AGAINST DIVERSIFICATION AS A STRATEGY. Diversification is the act of introducing variety into an existing business; it is an addition of valued products in relation to organizations productivity. Diversification involves a lot of responsibility; it is not a thing that should be done in a rush. When it is successful, it gives great competitive advantage and a substantial growth but if it fails it could lead to very grave consequences. It is used to defuse the risk of losing out totally if one business performs better than the other. Arguments in favour of diversification is that, * It makes it simpler for a business to protect its capital when it is assigning funds to other investments. * It lowers the risk of putting all the eggs in one basket * It provides the human resource department the chance to improve and also attract efficient professionals. * It safeguards against financial failure if the market becomes dormant. * It also helps in managing risk and lowers the instability of an asset price change. Unfortunately, it does not depend on how diversified an organization is, risk cannot be totally removed. When an organisation diversifies, the risk is traded for either a market risk or an economic risk and it depends on the organizations portfolio, it also decides on how much of equity that will be unprotected to each type of risk that may surface. Although diversification reduces the exposure of a certain risk, it also reduces prospective...
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...Islamic Architecture in the UAE Many cities all over the world are developing to become important urban areas in all respects like Tokyo, New York and Mumbai. Every city has some reasons for their develop like building factories, importance of the location and much more. On the other hand there are some cities that had decline like Detroit, Flint and Cleveland because they only have depended on one resource for income. Abu Dhabi has grown through its economic vision and it is trying to sustainable its development through diversification to avoid declining. Development and growth in cities is shown through some reasons. The strategic location of the city. For this reason, most major cities are on rivers or at the junction of important overland routes (City, 2008). Moreover some cities owe for the importance of religion and became centers of worship (City, 2008). For example the city of Rome survived the collapse of the Roman empire because it was the capital of western Christendom (City, 2008). Early cities that developed strong military forces added to their territory, wealth and importance by conquest. Favorably located settlements often became large and prosperous through commerce (City, 2008). Also some modern cities owe to their development and to the fact that they were built as national capitals. Like Washington, D.C; Canberra, Australia (City, 2008). Climate also is a an important factor; the cities of Florida owe much of their growth to the state’s...
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...Globalization And Your Business, Community and You Indiana Wesleyan University Globalization is becoming a buzzword in today’s society but what does it really mean in affects to your community, business and you personally? Globalization merges are economies social interactions, and cultures together making the world interdependent on one another. The importance of viewing the world as a whole and less as a sovereign of nations is becoming more evident as cultures blur, economies blend and the people are subject to the diversification of interacting with others whose traditions, beliefs and ethical views vary from our own. Recently, I asked two individuals, Doyle and Todd, to discuss their views of how globalization as touched their community, business and them personally. They have also expressed their view of whether these impacts have been positive, negative, or a combination. While globalization touches almost every one, the distribution channels are uneven in concentration with the heavier industrialized nations being harder hit. There was mixed reviews on globalization and its impact with my interviewees. Doyle, whose community is immersed in the steel industry, views the overall effects as negative. Low prices seem to be the driving force due to this market’s competitive environment where price is dominant over product features. Also, the U.S. industries find it hard to compete when foreign governments subsidies steelmaking, have less concern over the environment...
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...Candidate Name: Yashraj Shukla Candidate Number: 002272-0143 Session: May 2014 Introduction: Chewing tobacco, more commonly known as Gutka in India, is a social concern in India; specifically in the northern states of India. Due to gutka being a social concern the state governments in India have begun to place a ban against the production and consumption of gutka. A ban is an official order that prohibits something, in this case it prohibits the production and selling of gutka. Gutka is a sweetened mixture of chewing tobacco combined with a mixture of two types of nuts, betel and palm nut. State governments have imposed a ban on the consumption and production of gutka; however it has not been implemented by the central government of India. According to the following table smokeless tobacco (such as gutka) is consumed by 25.9% of the population which would be approximately 329 million people. As gutka is sold at nominal prices it’s easier to obtain than the other forms of tobacco. This allows the lower income groups to purchase and consume gutka rather than other forms of tobacco such as cigarettes, pan masala etc. This is supported by Table 1. Table 1 Current Population of India 2013 1.27 Billion1 Population Consuming Gutka 329 Million Rural Population Consuming Gutka 29.3% Urban Population Consuming Gutka 17.7% People in rural areas tend to be from an economically backward society and thus do not possess the same amount of money...
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...Jobs come and go well in accordance with the economy. If there is an economic surplus hence it creates more jobs for the people. For example the declined price of oil barrels in the oil and gas sector will also affect Oil Drilling companies in terms of selling price and expenditures. Generally, there is a need to cut unnecessary spending in order for oil companies to survive. Other source of income is tourism, agriculture and manufacturing. Hence as economic development improves, there are varieties of consequences that will change the current state of the economy such as the disappearing jobs, the projected jobs for the future and the types of education required to prepare for the projected jobs. As Brunei Darussalam is working towards achieving...
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...CHAPTER 1 SUGGESTED ANSWERS TO CHAPTER 1 QUESTIONS 1.a. What are the various categories of multinational firms? ANSWER. Raw materials seekers, market seekers, and cost minimizers. b. What is the motivation for international expansion of firms within each category? ANSWER. The raw materials seekers go abroad to exploit the raw materials that can be found there. It just happens that nature didn't place all natural resources domestically. Market seekers go overseas to produce and sell in foreign markets. The cost minimizers invest in lower-cost production sites overseas in order to remain cost competitive both at home and abroad. In all cases, the firms involved recognize that the world is larger than the home country and provides opportunities to gain additional supplies, sell more products or find lower cost sources of production. 2.a. How does foreign competition limit the prices that domestic companies can charge and the wages and benefits that workers can demand? ANSWER. As domestic producers raise their prices, customers begin substituting less expensive goods and services supplied by foreign producers. The likelihood of losing sales limits the prices that domestic firms can charge. Foreign competition also acts to limit the wages and benefits that workers can demand. If workers demand more money, firms have two choices. Acquiesce in these demands or fight them. Absent foreign competition, the cost of acquiescence is relatively low, particularly if the industry is unionized...
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...Causes of unemployment in Botswana Lack of economic diversification Unemployment is caused by lack of economic diversification. Botswana is mainly dependent on mining sector, it is failing to equip other sectors that would assist in solving unemployment. Though economic diversification is considered as one of the strategies to solve unemployment is not happening for example Botswana embarked on privatization, it did not succeed. Privatization of Air Botswana and Botswana Meat Commission failed, but if such initiatives do not succeed then there is no employment creation. Increased rates of business failure Public enterprises which are supposed to create employment in Botswana are not performing well. From the 2014/2015 Botswana Budget Speech,...
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