Economics, Page 2

Investment Management: Rational and Irrational Markets

Investment Philosophy and Market View Investment philosophy Investment philosophy can be defined as those strategies or principles that guide an investor in his investment decisions such as value, technical, growth and the fundamentals (Shleifer 2000). In this case, the portfolio is strictly focused on small carefully selected assets, after carrying...

Index Funds vs. Actively Managed Funds

Introduction This paper contains a comparison of the actively managed funds and the index funds. To begin with, the actively managed fund is the liquidity pool which has a portfolio that is used as a platform of a trade by investors to meet their long-term objectives in an investment. On...

Causes of 2007 Financial Crisis

The worldwide financial meltdown is among the various types of financial crises, which are known to have serious long-term implications on the global economy. Various financial economists have tried to raise theories regarding the issue as well as trying to offer possible solutions on how to prevent such situations. The...

United Kingdom Tax System Overview

Introduction Taxation can be described as the way by which governments finance their spending by imposing charges on individuals and companies. Most nations use taxation to encourage and discourage economic decisions (Smith, 2006). For instance, taxation on personal income in terms of the amount paid as interest on mortgage leads...

Eurozone Money Market Future 2012

Introduction The fear of the Euro plunging into dilution had gripped the financial world completely. The developed economies in Europe Union (EU) failed to raise money for their bonds due to a decline in the confidence of the international financial market on euro zone. EU’s debt crisis worsened further since...

India and China Economic Rise Implications on Currency Markets and World Economies

Strong economies are emerging all over the world, but both China and India are still ahead because they are taking international markets by storm. Their rapid growth has pushed them into global markets and possibilities of development in their own regions. Nevertheless, these possibilities are rapidly turning into real development...

Financial Analysis of Wells Fargo Bank, U.S. Bank and JP Morgan Chase Bank

Introduction The aim of every organization is to maximize profit while minimizing costs. The operations of an organization in a given business environment aims at ensuring that the organization achieves its objectives. Financial performance of an organization is important for investors. However, it is not the only measure of the...

Government Policy Effect on the Insurance Market in Saudi

Introduction Government policy has contributed to the growth of the insurance policy in Saudi Arabia. This has mostly been through the creation of favorable conditions for the development of insurance firms and their ability to thrive. The paper has successfully looked at laws that were established in order to increase...

The Foreign Direct Investment: Company’s Engagement Reasons

Introduction Foreign Direct Investment (FDI) is defined as a process where residents from another country acquire ownership of assets of a firm in a foreign country with the purpose of controlling production, distribution among other purposes (Moosa 2002 p.1). The IMF defines FDI as ‘ an investment that is made...

Bank Loans on Businesses Analysis

Introduction American companies seeking to get loans from banks to expand their businesses are unable to access them due to the reluctance of banks to lend. This is because the banks have not yet fully recovered from the losses they incurred from the sub-prime mortgage crisis. The industrial and commercial...

The Federal Reserve Actions Towards Inflation

Inflation is one of the many economic heats that confront the world. Economic experts have always congregated to look for solutions by developing strategies to deal with inflation. Its adverse effects have made the issue to be the most understood aspect of the global economy by the learned and those...

2011 European Crisis, European Union Economic Ploblems

Introduction The European financial crisis arose out of fiscal measures adopted in several European countries. The international community got concerned in late 2009 and at the beginning of 2010. The European countries had accumulated high amounts of sovereign debt. In Ireland, the debt had increased due to bank bailouts. There...

Global Trends in Foreign Direct Investments

Improved international relations, technological development, growth in international trade, and development of reliable communication channels have led to rise in globalization. Globalization is the process through which regional economies integrate into a global network of trade; with globalization, multinationals and private companies are able to take advantage of enlarged global...

Financial Risk Assessment

Introduction More and more economies have developed the tendency to rely on private capital flows to sustain themselves and therefore have also become more prone to risks that come with the volatility associated with such capital flows (Baumol 2007). Researches have been carried out to help establish a comprehensive framework...

Oil Prices Affecting Stock Market in Gulf Countries

Introduction There is a large volume of studies on the correlation between oil prices and macroeconomics variables. Most of these studies have discussed the important effects of oil prices fluctuations on economic activities in the emerging and developed countries. One important factor of using oil price changes as a cause...

Do Analysts and Auditors Use Information in Accruals?

The last several decades could be characterized by the dramatic changes in the structure of society and market. These alterations are conditioned by the blistering development of technologies and approaches used to attain success and become beneficial. Furthermore, the changes in the structure of market conditioned the growth of its...

Risks and Returns Analysis Issues in Business

The risk and return associated with any type of investment bear several similarities. The more the “appetite” for high returns, the higher the level of risk a business entity has to accept. In other words, risks and returns are directly proportional to each other when it comes to investment (Greenwood...

Strategies That Fit Emerging Markets

Introduction Written by Khanna, Palepu, and Sinha (2005), the article ‘Strategies that Fit Emerging Markets’ is an informative piece that acknowledges the biggest challenge, namely globalization, which major businesses face today. Top-level management of large multinational corporations reveals how globalization has made it almost impossible to apply traditional strategies that...

The Use of Debt in Tax-Exempt Economy of Kuwait

Abstract This research will investigate factors that determine the capital financing structure of firms within a tax-exempt economy, Kuwait. It will question why companies in a tax-exempt economy, regardless of the lack of debt incentives, continue to prefer debt financing to internal sources of capital. The research attempts to fill...

Pension Plans and the Economic Troubles

Before the oil crisis in 1974, private and public pension plans were considered in terms of total social security benefit package. The economic troubles arising from the crisis triggered renewed thinking resulting into integration of the two systems. Overall private pensions plans was not a widely practiced tradition and the...

Financial Projections for a Coffee Shop

Dens Coffee shop is set to become a central part of the lives of coffee addicts in Tower Hamlets, London. It will offer the perfect environment for people to meet or just waste the day away as they sip a cup of coffee. The coffee shop will have 1200 square...

Commercial Bank of Dubai Announces Its Quarterly Figures

Introduction Commercial Bank of Dubai disclosed its financial results with reports of positive prospects. The bank had registered a one percent increment in its net profit as compared to the previous year with AED 0.40 earnings per share. Its return on average equity and return on average assets were reported...

Advantages and Disadvantages of Speculation

Advantages of Speculation Speculators play an important role in financial markets, because they give the markets the extra buoyancy needed to carry out trades. They are also important in the financial markets because “they provide information about the fundamental values of investments” (Duffie). Speculators will only buy when the conditions...

Application for Secured Loan for a Japanese Restaurant

I humbly forward my request for a loan of $50,000, which I will use to purchase ABC, a Japanese restaurant. I will secure the loan using my equity of $200,000. I will be comfortable to pay the loan in 5 years’ time covering both interest and principle. Currently I am...

Causes of the Subprime Mortgage Crisis in the USA

The paper is a critical examination of what led to the 2007 subprime mortgage crisis in the United States of America. It is worth noting that the subprime mortgage crisis is a financial as well as real estate crisis that occurred between 2007 and 2010. Subprime refers to the credit...

2007 Financial Crisis Overview and Analysis

Financial systems are the very foundation and heart of a free market economy. Therefore, it is not surprising that the financial crisis witnessed in 2007 to 2008 sent panic waves globally as investors and governments realized the possibility of the total collapse of the world’s economic system. With the proliferation...

How Banks Contributed to Credit Crunch

Introduction Credit crunch refers to an economic condition where the amount of credit available reduces drastically either due to tightened rules by the banks or reduced amount of money available. The crunch may also be caused by Massive external borrowing, merging credit with equity culture, fluctuation in business banking model...

Euro Currency Problems Analysis

It is possible to state that Europe’s debt crisis has become one of the most burning issues of the continent. The countries of the Eurozone are trying to decide whether they need the common currency. The crisis influences the lives of many people living in those countries. Admittedly, it is...