Complex financial instruments

Investing in illiquid financial instruments requires a certain degree of financial education in order to proper understand all the risks entailed by the investment. Less expert investors lack the basic tools for evaluating more complex structures and liquidity costs; this, in turn, leaves room for opportunistic behaviours by intermediaries. New regulations are targeted to improve risk-based transparency standards and set tighter conduct of business rules for intermediaries’ commercial policies. Nevertheless, some important issues still remain on the desk requiring better insight.

18p nguyenminhlong19 21-04-2020 14 0   Download

After studying this chapter, you should be able to: Understand what derivatives are and how they are used to manage risks; understand how to account for derivatives; analyze whether a hybrid/compound instrument issued for financing purposes represents a liability, equity, or both;...

62p shiwo_ding2 03-04-2019 26 3   Download

After studying this chapter, you should be able to: Understand how derivatives are used in hedging and explain the need for hedge accounting standards, understand how to apply hedge accounting standards, account for share appreciation rights plans,...

32p shiwo_ding2 03-04-2019 18 2   Download

The study aims at indicating determinants for Thai mutual fund growth based on two disciplines. The first discipline is the exploratory of Thai mutual funds via descriptive study or fact finding which indicates Thai mutual funds structure in terms of product concentration and the competitive situation as discussed in the last section. The second discipline is econometric model namely fixed effect model testing whether management fees, administrative fees, and other determinants affect the mutual fund growth.

0p hongphuocidol 04-04-2013 60 12   Download

The provisions for embedded derivatives in IAS 39 apply to derivatives embedded in insurance contracts or financial instruments with discretionary participation features, within the scope of IFRS 4. However, if the embedded derivative is itself an insurance contract or a financial instrument with a discretionary participation feature within the scope of IFRS 4, it need not be separated and measured in terms of IAS 39.

30p bin_pham 06-02-2013 68 4   Download

Stereotypical accountants – depicted tirelessly in literature and cinema – hunch lifelessly over their desks adding and subtracting endless columns of numbers. It is a dismal job held by nameless, glassy-eyed hordes. While these fictional portrayals were never accurate, the focus on numbers carries more than a grain of truth. Traditionally, accountants kept the books and assured that statutory requirements were met.

13p taisaovanchuavo 26-01-2013 49 3   Download

While debt instruments such as diaspora bonds can have a positive impact on a country’s development (as Israel has experienced, for example), the majority of policymakers and diaspora communities have limited awareness about this financial instrument. 412 Moreover, governments are often deterred by complex regulatory requirements for issuing diaspora bonds abroad.

22p machuavo 19-01-2013 43 2   Download

The report presents an interesting analysis concluding that there are entities within all business models that have failed during the crisis.

28p machuavo 19-01-2013 44 1   Download

Both cross-border and domestic bank credit are (generally) denominated in multiple currencies. The BIS international banking statistics in combination with domestic bank credit data from the IMF’s International Financial Statistics, along with some assumptions, yield an estimate of the currency breakdown of total credit to non-banks (either including or excluding bank credit to governments) in a particular country. This breakdown allows us to express credit stocks at constant exchange rates (in this particular case, end-Q2 2011 rates).

29p enter1cai 12-01-2013 79 5   Download

The analysis in this paper suggests that hedge funds play a very positive role in financial markets by providing liquidity to thin markets where mis-priced financial instruments are to be found. This type of activity reduces volatility rather than increasing it. Indeed with the rapid growth of structured products in recent years, particularly in Europe and Asia, hedge funds have been quite critical in containing the volatility that might otherwise have arisen.

21p quaivatdo 18-11-2012 62 5   Download

In a decentralized-decisions economy under uncertainty, the financial system can be seen as the complex of institutions, infrastructure, and instruments that the society adopts to minimize the costs of transacting promises under agents’ incomplete trust and limited information. Building on a microeconomic, general equilibrium model that portrays such fundamental function of finance, this study analytically shows that, in line with recent empirical evidence, the development of financial infrastructure stimulates larger and more efficient capital industrial accumulation.

25p truongdoan 10-11-2009 130 21   Download