S.-based and each accounts for approximately 8% of the sector.
Knowledge is power in today's business world and where power goes, manipulation can't be far behind. Not a day goes by without talk of a new merger, acquisition or initial public offering (IPO) career in the securities industry can offer exciting work if you enjoy working in a competitive and demanding atmosphere. Investment bankers, stock brokers, and stock traders all make up the securities industry providing services to each other, as well as the general public. The primary differences between the three are the services they provide and who they provide these services to. Investment banking seems to be the most interesting of the three, as well as the most rewarding. This is due to the nature of the job an investment banker must perform. A career as an investment banker has its pros and cons just as any career does,…...
mlaReferences
Davis, I.S. (2003) Investment Banking, Palgrave Macmillan.
McAleese, D. (2001) (2nd Edition) Economics for Business, Competition, Macro-stability & Globalization, Harlow: Prentice Hall
Sloman, J., Sutcliffe, M.(2001) (2nd Edition) Economics for Business, Pearson Education
Winters, L.N., (1992) (4th Edition) International Economics, Harper Collins Academic.
Investment Banking Business Model and Financial Stability
The banking industry forms an integral part of any economy. It is the unit of the economy that serves to finance all the other sectors. Through the banking system, businesses can obtain credit and move within the meaningful circle. In every sense, banks fulfill the financing needs of the players in a business setup. The number of companies that are seen to take place in life is all related to the ability to finance their activities. The use of banking instruments to regulate the economy also serves a meaningful role in the economy. This is the role of the investment banks. The central bank in every country serves the role of regulating all the other banks and ensuring fair play in the trade. Banks can either be classified as investment banks or retail banks. Their mandate is distinct and well vouched in the rules…...
mlaReferences
Hryckiewicz, A. (Dr.). (2010). Originators, Traders, Neutrals, and Traditioners, Various Banking Business Models Across The Globe. Does the Business Model Matter for Financial Stability? Kozminski University and Goethe University of Frankfurt
De Jonghe, O. (2009. Back to the Basics In Banking? A Micro-Analysis of Banking System Stability. European Banking Center Discussion Paper No. 2009-13S
Investment Banker
Planning for one's career is often a difficult and challenging situation to experience. Understanding what's important to you and what skills and personal desires you wish to demonstrate to others to contribute society encapsulate what's important in the process of distinguishing between different career options. The purpose of this writing is to analyze my decision of a future career in investment banking. I will first give background about the career choice and then apply my own personal understanding of how these choices align with my talents. This process of evaluating and applying different standards and options will be beneficial to any person who desires to investigate a career within the investment banking industry or other financial sectors.
Background information about investment banking is important and necessary in order to gather the proper knowledge to make a wise and applicable decision towards a career choice. Investment banking deals with companies and…...
applying for the SEO internship on Wall Street for several reasons. Foremost is my great love of finance, particularly the investment field. My major AT WHAT UNIVERSITY is finance and accounting, and I have found my major suits me perfectly, which is why I want to continue my education with work experience in the premier financial district in the United States. I feel my finance and accounting background has prepared me for a sales and trading internship, and that I understand the many issues and complexities this internship would provide. I also feel that I can work well with others, and could develop good working relationships with clients from every type of institution and management philosophy. Helping people invest wisely for their futures is not only a career to me, it is something that can make a vast difference in people's lives when they most need it, and I…...
brave world: Investment banking 2008 (B):KEL380)
Why were proponents of deregulation so successful in the late 1990s? How much can we blame deregulation for the meltdown in the investment banking industry? And how could the government have foreseen and/or stopped the domino effect before the crisis of 2008?
Proponents of deregulation were successful due in part to increase wealth of American citizens. Housing prices were rising at an incredible pace. Many Americans were becoming wealthy by simply "flipping" houses on the market. With this wealth, came an increase in prosperity and a standard of living for many Americans. However, this practice soon came to an end when the housing market bubble burst in late 2006. Much of the blame can be attributed to the greed of the investment banking and financial institutions. Investment banks were essentially giving loans to individuals who could not afford the payment. In turn, the investment banks…...
mlaReferences
1) Blodget, Henry. (2010). Goldman Shorted The Housing Market BEFORE It Sold Abacus To Those Idiot German Banks. (online). Available: (April 22, 2010)http://www.businessinsider.com/henry-blodget-goldman-shorted-the-housing-market-before-it-sold-abacus-to-those-idiot-german-banks-2010-4
2) AOL Real Estate Staff. (2008). Housing Market in 2000s? A Great Decade (online). Available: / (April 24, 2011).http://realestate.aol.com/blog/2010/12/07/housing-market-takeaway-it-was-a-great-decade
3) Author Unknown. (2008) CONDENSED FINANCIAL INFORMATION OF REGISTRANT THE BEAR STEARNS COMPANIES INC. (online). Available: (April 24,2011)http://sec.edgar-online.com/bear-stearns-companies-inc/10-k-annual-report/2008/01/29/section27.aspx
4) Author Unknown. (2008). Subprime Crisis: A Timeline. (online). Available: (April 23, 2011)http://money.cnn.com/2008/09/15/news/economy/subprime_timeline/index.htm
" Investment banking is not for the weak minded or the soft hearted and I must continue to develop my emotions towards this way of thinking.
I know there is much more to learn in the realm of investment banking. The profession itself demands knowledge of more than just business and economic jargon. Good investors know how to spot trends and cycles that others cannot do as easily. This ability, to more or less predict the future, must continually be honed in order to become successful at this profession. Keeping an open mind is absolutely imperative in sustaining a solid development towards understanding and success in this field. Practicing entertaining new ideas, that may seem strange or odd at first should be kept in mind when approaching new subjects for the first time.
Where I Am Going: Short- and Long-Term Plans
My first priority is to finish my MBA program which should happen…...
mlaReferences
Casparie, J. (2007). What Exactly is an Investment Banker? Entrepreneur, 12 June 2007. Retrieved from http://www.entrepreneur.com/article/179958
King, M. (2012). How to get into investment banking. The Guardian UK, 20 April, 2012. Retrieved from bankinghttp://www.guardian.co.uk/money/2012/apr/20/how-get-into-investment -
Rosenthal, J. (2013). Who wants to be an investment banker? The Economist, 21 Nov 2012. Retrieved from wants-be-investment-bankerhttp://www.economist.com/news/21566442-dinner-party-problem-who -
Stephenson, D. (2012). A Career in Investment Banking: Worth the Investment? Firmex, 3 Oct 2012. Retrieved from worth-the-investment/http://www.firmex.com/blog/a-career-in-investment-banking -
This would play a role in helping to bring the Czech Republic into the EU in 2004. The effect that this would have on the Prague Stock Exchange is that it would cause it to rise to 1,940. At which point, it would have a severe down trend economy during 2008 and into 2009. The only difference is: that the various reforms and economic policies that the government was using at the time, helped to contribute to mitigating the effects of the slowdown (as the economy would experience a less severe economic contraction of 3.4%). ("Czech Republic")
The price movements of the Slovak equity market in the last 10-15 years
The ratislava Stock Exchange was founded in 1991 and has been in operation since 1993. ("asic Information") Like what occurred in the Czech Republic the Slovak stock market went through two bear markets that would last until 1998 -- 1999. Where,…...
mlaBibliography
"Basic Information." Bratislava Stock Exchange. 2010. Web. 24 Apr. 2010
"Czech Republic." State Department. 2009. Web. 24 Apr. 2010
"History of the Exchange." Prague Stock Exchange. 2009. Web. 24 Apr. 2010
These types of investments are often illiquid, so the investor needs to view them as long-term investments. However, the lack of liquidity also means that for the most part they have low levels of correlation with the broad market.
Derivatives are another possibility, and their potential impact on the portfolio will be discussed in the next question. They can either increase risk or decrease risk, depending on the type of derivative and how it is used.
Overall, the impact of alternative investments is to reduce the degree to which the portfolio is subject to the equity and fixed income markets. Alternative investments are often used as an ancillary component of the portfolio, to reduce the portfolio's overall volatility but with the hopes that returns will not suffer as a result.
3. Derivatives can be used for a couple of different purposes in a portfolio. The first is to increase leverage (risk), thereby…...
mlaWorks Cited:
De Santis, R. & Sarno, L. (2008). Assessing the benefits of international portfolio diversification in bonds and stocks. European Central Bank working paper. Retrieved May 6, 2010 from http://www.ecb.int/pub/pdf/scpwps/ecbwp883.pdf
Driessen, J. & Laeven, L. (no date). International portfolio diversification benefits: Cross-country evidence from a local perspective. International Monetary Fund. Retrieved May 6, 2010 from http://www.luclaeven.com/papers_files/Diversification_JBF_final.pdf
Lhabitant, F. (2000). Derivatives in portfolio management: Why beating the market is easy. EDHEC. Retrieved May 6, 2010 from http://www.edhec-risk.com/edhec_publications/RISKReview1055927251987929638/attachments/EDHEC_WhyBeatingTheMarketIsEasy.pdf
Schweizer, D. (2008). Portfolio optimization with alternative investments. European Business School. Retrieved May 6, 2010 from D.pdfYavas, B. (2007). Findings indicate that co-movements among the U.S., Germany and Japan markets are significant. Pepperdine University. Retrieved May 6, 2010 from http://gbr.pepperdine.edu/072/diversification.htmlhttp://www.wbiconpro.com/339-Schweizer,
74). This dearth of information was likely caused by a reluctance to examine investment decisions on the part of investors themselves; nobody likes finding out that their "thought-out" considerations are not any more accurate than gut choices, and in fact, those gut choices likely had more influence than all of their mental work.
In the last decade, however, strides have been made in the study and analysis of investment behavior, revealing surprising details about what goes in to making stock trades. The first important work in the study of individual investment behavior was the realization that human beings do not always act rationally in regards to financial decisions, because according to the previously quoted Brad Barber and his co-author Terrance Odean, "the field of modern financial economics assumes that people behave with extreme rationality, but they do not" (Barber & Odean, 1999, p.41). Although "differences in investor literacy about financial markets"…...
mlaWorks Cited
Barber, Initials, & Odean, Initials. (1999). The courage of misguided convictions. Financial Analysts Journal, 55(6), 41-55.
Dhar, R, & Zhu, N. (2006). Up close and personal: investor sophistication and the disposition effect. Management Science, 52(5), 726-740.
Grinblatt, M, & Keloharju, M. (2001). What makes investors trade?. The Journal of Finance,
56(2), 589-616.
Investment spending is very significant because it is an essential ingredient in economic development and growth. The decrease in the level of investment spending may cause a recession. Most recessions occur as a result of fall in investment spending (Paul & Krugman, 2007). Swings in investment spending are very dramatic than those in customer spending. eduction in consumer spending is normally a result of a progress that starts with a slump in investment spending. The most significant factors that determines investment spending are the rate of interest and anticipated future real GPD. To understand the kind of reasoning, first there is a need to note that planned investment spending is the investment spending that firms intend to pass through over a given period, in contrast to investment spending that happen but is not planned (William & Greene, 2008). Planned spending on investment projects is negatively the same as the interest…...
mlaReferences:
William H. Greene, Econometric Analysis, 5th Edition, Pearson Education, 2008, Table F3.1, U.S. Investment Data, 1968-1982
Paul R. Krugman, Robin Wells, Kathryn Graddy, Economics: European Edition, Worth Publishers, 2007
N.E. Savin and Kenneth J. White, The Durbin-Watson Test for Serial Correlation with Extreme Sample Sizes or Many Regressors, Econometrical, Vol. 45, No. 8 (Nov., 1977), pp. 1989-1996
R.W. Farebrother, The Durbin-Watson Test for Serial Correlation when there is no Intercept in the Regression, Econometrical, Vol. 48, No. 6 (Sep., 1980), pp. 1553-1563
Investment Demand
usinesses experience profit cycles implying that market fluctuations are inevitable in an economy. Market demand plays a crucial role in the profitability of an enterprise and consequently affects the investment trend. A profitable firm is more likely to invest money to improve production facilities or to extend its business into other domains. Investors will analyze the profitability of any undertaking and only if the expected revenue is greater than the cost of capital will they invest in the project. Keynesian theory also states that the Marginal efficiency of Capital is inversely related to investment. "[t]o induce new investment 'the rate of return over cost must exceed the rate of interest'. [Richard C.. Johnsson] For all businesses profit is the ultimate motivation and any new venture is undertaken only if the internal rate of return is above the cost of capital defined by the prevailing rate of interest. Hence we…...
mlaBibliography
J. Bradford DeLong, From Investment Demand to the IS Curve: Low Interest Rates," Accessed on June 7th 2004, http://www.j-bradford-delong.net/multimedia/ISLM2.html
Richard C.B. Johnsson, 'The Liquidity-Trap Myth', Accessed on 7th June 2004, http://www.mises.org/fullstory.asp?control=1226
Using values found in a table of factors for calculating the present value of a dollar; the periods one through four have the following present value factors:
Year One= .9259
Year Two= .8573
Year Three= .7938
Year Four= .7350
Next these factors are multiplied individually by the net cash flow generated by the investment in each period.
Year One= $500,000
Year Two= $450,000
Year Three= $350,000
Year Four= $320,000
The multiplication calculation reveals the discounted cash flow values:
Year One= $500,000*.9259= $462,950
Year Two= $450,000* .8573= $385,785
Year Three= $350,000* .7938= $277,830
Year Four= $320,000*.7350= $235,200
The total sum of the cash flows net present value is $1,361,765; as such the net present value as compared to the overall investment of $1,200,000 is positive $161,765, and therefore the projected rate of return on this investment is greater than the eight percent cost of capital, and the investment…...
mlaReferences
Marshall, D. & McManus, W. (1996). Accounting: What the Numbers Mean.
Third Edition. McGraw Hill.
Investments are the assets or items purchased with the anticipation to generate the income in the future. In the economic sense, investments refer to the goods and services purchased and not consumed today for the purpose of generating wealth in the future. Similarly, going to a university or building a factory to produce goods and services are the examples of investments. Within a financial environment, investors purchase assets with the hope that they will appreciate in the future, thus, creating wealth for the investors. Examples of investment in the financial circle include purchasing of stocks, or real estate property with the anticipation that they will appreciate in the future. Despite the benefits that can be derived from the investment purpose, the investment is not something an individual can take lightly. Investors are to implement a careful planning to reap the benefits of an investment. Typically, an investor can lose his…...
mlaReference
Costa, D. (2011). The Portable Private Banker Investing Efficiently through Mutual Funds and ETFs. UK. CreateSpace Independent Publishing Platform.
Morningstar (2014). Exchange Traded Funds, Morningstar website. Avaliable from:
http://news.morningstar.com/etf/Lists/ETFReturns.html
Morningstar (2014). ProShares Ultra Nasdaq Biotechnology BIB, Morningstar website. Avaliable from: http://performance.morningstar.com/funds/etf/total-returns.action?t=BIB®ion=usa&culture=en-U.S .
Investments
A low payout on investments makes sense at certain times and in certain circumstances. Individuals or entities that receive a lower payout are oftentimes doing so to address issues such as higher tax rates and a deferred tax liability. If the investor's tax rate from income is lower than the tax rate for capital gains, then it makes complete sense to take a lower rate of payout because it saves the investor money on taxes.
Another reason for accepting a lower yielding investment from a business viewpoint is that it can decrease the amount of capital that needs to be raised for certain projects or investments. As one recent study determined "there is extensive literature in corporate finance on the proper way to incorporate flotation costs in the determination of project net present values (NPV)" (Simonds, 2006, p. 25). If a company's flotation costs can be lowered through the use of…...
mlaReferences
Economist, (2006) Instant returns, Vol. 381, Issue 8498, pp. 80
Simonds, R.R.; (2006) Income capitalization, flotation costs, and the cost of capital, Journal of Property Tax Assessment and Administration, Vol. 3, Issue 4, pp. 23 -- 29
nvestments: Stock Selection
On March 9, 2009 the stock market settled on a 12-year closing low with the Dow Jones ndustrial Average (DJA), a barometer of the economy and stock market trajectory, closing at 6,547.05. (Twin, A. March 9, 2009). The precipitous plunge for the DJA from an "all-time high of 14,164.53" (Twin, A. October 9, 2007) reached on October 9, 2007 marked the timeline of the country's worst recession since the Great Depression. From the historic lows however, the market has rebounded dramatically closing at 12,105.78 on February 23, 2011, a gain of over 75% from the March lows (CNBC.com. February 23, 2011). The vicissitudes of the stock market over the past three plus years limn the debate over whether an investor who is risk averse would choose to invest in a stock market in which all stocks rise and fall together, or a market in which individual stocks move…...
mlaInvestors are marked by two extremes, the active investor who tracks, analyzes, and disseminates information on the companies in their investment portfolio, the economy, and global financial news which may influence the direction of their stock investments. At the other extreme is the investor who is socking away their five percent contribution with company match into their 401K. This investor cedes to expert portfolio managers, or trusts in the long run upward trend of equities as defined in index funds: S&P 500, Wilshire, and DJIA. While there are investors at both extremes the vast majority fall at some point on the spectrum, engaged but not able to fully commit the time or resources to portfolio management.
In this context the risk-averse investor will likely fall in with the preponderance of investors who have investment portfolios but are not actively managing them. The investor's portfolio may have individual stocks, mutual funds, or index funds. Which leads to the question, which environment would an investor desire to be in to attain their goal of reduced risk concomitant with acceptable return? The answer ironically comes from the same source, yet at bifurcated ends of an investment philosophy.
Warren Buffett considered the world's most accomplished and successful investor for over fifty years posits that a risk-averse individual could reach their investment objectives in either economic environment. In 2009, Warren Buffett entered into an agreement to purchase the remaining shares of Burlington Northern Railroad which his firm Berkshire Hathaway did not already own. His rationale for the purchase was simple "I basically believe this country will prosper and you'll have more people moving more goods 10 and 20 and 30 years from now, and the rails should benefit; it's a bet on the country, basically" (Crippen, A. November 3, 2009). This statement defines an investment strategy which suggests that over the long-term the stock market will generally move higher, the rising tide lifts all boats metaphor. Yes, stocks will fall, sometimes dramatically, across
I. Overview of JP Morgan Chase
II. Key Factors Driving JP Morgan Chases Success
III. Future Outlook for JP Morgan Chase
IV. Social Responsibility and Corporate Citizenship
- JP Morgan Chase is committed to giving back to the communities....
I. Introduction
II. Body
III. Conclusion
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