Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. What is the rationale of the double-play strategy?
The hedge funds deploy a double-play strategy in order to engineer steep increases in interest rates and steep declines in stock prices so as to gain from their short positions in the stock market and in the FX futures market.
However first some comments about the economic conditions prevailing at that time. In untimely August of 1998 external and domestic conditions deteriorated. The Dow Jones index refuse sharply by 300 points on August 5th and the Yen was at an eight year low at 147 on August 11th. Rumours were plentiful concerning abandonment of the peg. There was powerful selling pressure on HKD early August.
1. Entrepreneurs shorted the HKD by swapping HKD for USD.
2. On the equity markets the stocks index futures market open positions grow brusquely
The HSI FUTURES rise from 70000 contracts in June to 92000 contracts in August. The strategy of the Hedge Funds was to weaken the steadiness of the exchange value of the HK$ consequently as to produce sharply higher interest rates.
The sharp raise would then lower stock prices it was hoped. Hedge Funds sell HKD. This raise HKD interest rates(r). Such high interest rates can't be tolerated by property developers. Real Estate companies undergo serious losses and their stocks decline sharply. The HSI goes down as the HIBOR goes up. At this point one more strategy is to short sell borrowed shares. So far the existence of futures markets makes this redundant. A speculator is able to short the HSI index instead.
The Rise of Derivative Market: In the 1980s, the process of liberalization and deregulation of the financial markets gained momentum when the British and American leadership l
If the EPS is Rs.5, dividend pay-out ratio is 50%, cost of equity is 20% and growth rate in the ROI is 15%. What is the value of the stock as per Gordon's Dividend Equalisation Mod
Briefly outline the necessities of the UK version of ISA 700/ 750/ 706 and discuss the factors which would manipulate you as the external auditor in forming an opinion on the finan
The financial institutions that originate the loans sell a pool of cashflow-producing assets to a specially created third party that is called a
#pseudocode for finance class ..
Suppose a company is quoting swap rates as follows: 7.75 - 8.10 percent yearly against 6-month dollar LIBOR for dollars and 11.25 - 11.65 percent yearly against six-month dollar L
Uses of operating cycle in business
At 31 July 2010 this instrument meets the definition of a derivative: Small or no initial investment. Its value is dependent on an underlying economic item; exchange ra
1. Tax-backed debt and 2. Revenue bonds are two types of municipal bonds.
Define country risk. How is it different from political risk? Country risk is a broader quantify of risk as compared to the political risk, as the former encompasses political ri
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd