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Investment Securities
INVESTMENT SECURITIES INTRODUCTION Individuals seeking to invest their savings are faced with numerous financial products and degrees of risk. An individual investor can invest in a corporation as an equity owner or as a creditor. If an individual chooses to become an equity owner, he will hopefully benefit in the growth of the business. He can purchase common stock or preferred stock in the corporation. Assume an investor purchases 1,000 shares of ABC Corporation common stock. ABC has 100,000 shares of common stock outstanding. Our investor owns 1% (1,000 divided by 100,000 = 1%) of the outstanding shares. He will receive 1% of any dividends paid by the corporation and would receive 1% of any remaining assets upon dissolution of the corporation, after all creditors have been paid. Our investor would receive a stock certificate evidencing his ownership of 1,000 shares of common stock of ABC Corporation. He could sell his 1,000 shares, or any lesser amount, at any time. Our investor hopes to be able to sell his shares at a higher price than he paid for them. In other words, he hopes to realize a capital gain on the sale of the shares. Our investor would also like to receive dividends on his 1,000 shares. Assume ABC pays a quarterly divi- dend of $0.20 per share. Our investor would receive a quarterly dividend of $200 or an annual dividend of $800. The two main reasons an investor buys stock in a corporation are 1. To receive any dividends paid by the corporation 2. -
WHS FX Options Guide
Getting started with FX options WHS FX options guide Predict the trend in currency markets or hedge your positions with FX options. Refine your trading style and your market outlook. Learn how FX options work on the WHS trading environment. WH SELFINVEST Copyrigh 2007-2011: all rights attached to this guide are the sole property of WH SelfInvest S.A. Reproduction and/or transmission of this guide Est. 1998 by whatever means is not allowed without the explicit permission of WH SelfInvest. Disclaimer: this guide is purely informational in nature and can Luxemburg, France, Belgium, in no way be construed as a suggestion or proposal to invest in the financial instruments mentioned. Persons who do decide to invest in these Poland, Germany, Netherlands financial instruments acknowledge they do so solely based on their own decission and risks. Alle information contained in this guide comes from sources considered reliable. The accuracy of the information, however, is not guaranteed. Table of Content Global overview on FX Options Different strategies using FX Options Single Vanilla Vertical Strangle Straddle Risk Reversal Trading FX Options in WHSProStation Strategy settings Rules and Disclaimers FAQ Global overview on FX Options An FX option is a contract between a buyer and a seller for the What is an FX option? right to buy or sell an underlying currency pair at a specific price on a particular date. EUR/USD -10 Option Premium Option resulting in a short position 1.3500 - 1.3400 +100 PUT Strike Price – Current Market Price Overal trade Strike price +90 You believe EUR/USD will drop in the weeks to come. -
Chapter 06 - Bonds and Other Securities Section 6.2 - Bonds Bond - an Interest Bearing Security That Promises to Pay a Stated Amount of Money at Some Future Date(S)
Chapter 06 - Bonds and Other Securities Section 6.2 - Bonds Bond - an interest bearing security that promises to pay a stated amount of money at some future date(s). maturity date - date of promised final payment term - time between issue (beginning of bond) and maturity date callable bond - may be redeemed early at the discretion of the borrower putable bond - may be redeemed early at the discretion of the lender redemption date - date at which bond is completely paid off - it may be prior to or equal to the maturity date 6-1 Bond Types: Coupon bonds - borrower makes periodic payments (coupons) to lender until redemption at which time an additional redemption payment is also made - no periodic payments, redemption payment includes original loan principal plus all accumulated interest Convertible bonds - at a future date and under certain specified conditions the bond can be converted into common stock Other Securities: Preferred Stock - provides a fixed rate of return for an investment in the company. It provides ownership rather that indebtedness, but with restricted ownership privileges. It usually has no maturity date, but may be callable. The periodic payments are called dividends. Ranks below bonds but above common stock in security. Preferred stock is bought and sold at market price. 6-2 Common Stock - an ownership security without a fixed rate of return on the investment. Common stock dividends are paid only after interest has been paid on all indebtedness and on preferred stock. The dividend rate changes and is set by the Board of Directors. Common stock holders have true ownership and have voting rights for the Board of Directors, etc. -
Investments 101: Fixed Income & Public Equities
NCPERS Trustee Education Seminar FIXED INCOME 101 May 14, 2016 Steve Eitel Senior Vice President Senior Institutional Client Advisor [email protected] 312-384-8259 What is a bond or fixed income security • A bond represents a loan to a government or business • Fixed income securities are debt obligations promising a series of pre-specified payments at pre-determined points in time Investor Loans $1000 Annual Interest Payments Company XYZ Repayment of Initial $1000 Loan at Maturity What Does the Global Bond Market Look Like? • U.S. makes up a little over a 1/3rd of the global bond market • Global bond market as of June 30, 2014 was approximately $87.2T according to the Bank of International Settlements statistical annex. Types of Bonds Government Bonds • Governments and Instrumentalities issue debt obligations to investors • Proceeds are used to finance the operation of the U.S. government • Types of Government securities include: - U.S. Treasury Bills, Notes, Bonds, Inflation-Protected Securities (TIPs), Zero Coupons - U.S. Agency Obligations/Government Sponsored Entities (GSE’s) - Federal National Mortgage Association (FNMA/Fannie Mae) - Federal Home Loan Mortgage Association (Freddie Mac) - Federal Farm Credit Bank (FFCB) - Federal Home Loan Bank (FHLB) - Tennessee Value Authority (TVA) - Small Business Association (SBA) - Direct U.S. Backed Agency - Government National Mortgage Association (GNMA/Ginnie Mae) - Foreign Government Issuers Types of Bonds Corporate Bonds • Corporations issue fully taxable debt obligations to investors • Proceeds are used to refinance existing bonds, fund expansions, mergers and acquisitions, fund operations, fund research and development • Types of Corporate debt securities include: - Secured Debt: backed by a specific pledged asset/collateral - Unsecured Debt: aka Debentures; backed by good faith and credit of borrower - Yankee bonds: foreign corporations issuing bonds in the U.S. -
BASIC BOND ANALYSIS Joanna Place
Handbooks in Central Banking No. 20 BASIC BOND ANALYSIS Joanna Place Series editor: Juliette Healey Issued by the Centre for Central Banking Studies, Bank of England, London EC2R 8AH Telephone 020 7601 3892, Fax 020 7601 5650 December 2000 © Bank of England 2000 ISBN 1 85730 197 8 1 BASIC BOND ANALYSIS Joanna Place Contents Page Abstract ...................................................................................................................3 1 Introduction ......................................................................................................5 2 Pricing a bond ...................................................................................................5 2.1 Single cash flow .....................................................................................5 2.2 Discount Rate .........................................................................................6 2.3 Multiple cash flow..................................................................................7 2.4 Dirty Prices and Clean Prices.................................................................8 2.5 Relationship between Price and Yield .......................................................10 3 Yields and Yield Curves .................................................................................11 3.1 Money market yields ..........................................................................11 3.2 Uses of yield measures and yield curve theories ...............................12 3.3 Flat yield..............................................................................................12 -
Bond Risk, Bond Return Volatility, and the Term Structure of Interest Rates
Bond Risk, Bond Return Volatility, and the Term Structure of Interest Rates Luis M. Viceira1 Forthcoming International Journal of Forecasting This draft: January 2010 Abstract This paper explores time variation in bond risk, as measured by the covariation of bond returns with stock returns and with consumption growth, and in the volatility of bond returns. A robust stylized fact in empirical finance is that the spread between the yield on long-term bonds and short-term bonds forecasts positively future excess returns on bonds at varying horizons, and that the short-term nominal interest rate forecasts positively stock return volatility and exchange rate volatility. This paper presents evidence that movements in both the short-term nominal interest rate and the yield spread are positively related to changes in subsequent realized bond risk and bond return volatility. The yield spread appears to proxy for business conditions, while the short rate appears to proxy for inflation and economic uncertainty. A decomposition of bond betas into a real cash flow risk component, and a discount rate risk component shows that yield spreads have offsetting effects in each component. A widening yield spread is correlated with reduced cash-flow (or inflationary) risk for bonds, but it is also correlated with larger discount rate risk for bonds. The short rate forecasts only the discount rate component of bond beta. JEL classification:G12. 1Graduate School of Business Administration, Baker Libray 367, Harvard Univer- sity, Boston MA 02163, USA, CEPR, and NBER. Email [email protected]. Website http://www.people.hbs.edu/lviceira/. I am grateful to John Campbell, Jakub Jurek, André Per- old, participants in the Lisbon International Workshop on the Predictability of Financial Markets, and especially to two anonymous referees and Andréas Heinen for helpful comments and suggestions. -
1. Securities Markets, Investment Securities, and Economic Factors
1. Securities Markets, Investment Securities, and Economic Factors What is a Security Investment of Money In pooled interest With expectation of Profit Managed by third party 2 primary types, and a third major; Equity (Ownership) Bonds (Debt) Money Markets (specific short term debt) There are others, those are the biggies, including Variable Insurances. Updated: August 2017 Equity Common Stock Primarily capital appreciation Voting rights Potential dividends Lowest liquidation claims in bankruptcy Preemptive Rights Round Lots (100) Updated: August 2017 Cumulative Voting Allocate all votes any way, including all for 1, benefits small owners. Statutory Voting Can allocate 1 vote per share per seat, benefits large owners. Updated: August 2017 Preferred stock Stated interest rate on certificate Higher liquidation claims in bankruptcy than common stock No voting No proportional ownership rights Par Value $100 Attachments; Straight Preferred: Nothing other than stated rate if BOD declares dividend. Callable: Issuer can force investor to sell the security to them. Higher stated return than straight. Convertible: Investor can convert the security into common shares. Lower stated return than straight. 100/(Conversion Factor)=(Number of Shares). Participating: If BOD declares larger dividend, this preferred gets larger dividend. Lower stated return than straight Cumulative: If dividends missed, all missed dividends must be paid to cumulative preferred owners before anyone else gets new dividend. Lower stated return than straight. Updated: August 2017 Broker/Dealer Updated: August 2017 Bonds/Debt Needed Definitions Par Face amount, amount paid on maturity, for bonds is $1000. ($100 for preferred stock) Coupon Stated interest rate, or nominal yield printed on the Certificate. -
Do Options-Implied RND Functions on G3 Currencies Move Around the Times of Interventions on the JPY/USD Exchange Rate? by O
WORKING PAPER SERIES NO. 410 / NOVEMBER 2004 DO OPTIONS- IMPLIED RND FUNCTIONS ON G3 CURRENCIES MOVE AROUND THE TIMES OF INTERVENTIONS ON THE JPY/USD EXCHANGE RATE? by Olli Castrén WORKING PAPER SERIES NO. 410 / NOVEMBER 2004 DO OPTIONS- IMPLIED RND FUNCTIONS ON G3 CURRENCIES MOVE AROUND THE TIMES OF INTERVENTIONS ON THE JPY/USD EXCHANGE RATE? 1 by Olli Castrén 2 In 2004 all publications will carry This paper can be downloaded without charge from a motif taken http://www.ecb.int or from the Social Science Research Network from the €100 banknote. electronic library at http://ssrn.com/abstract_id=601030. 1 Comments by Kathryn Dominguez, Gabriele Galati, Stelios Makrydakis, Filippo di Mauro,Takatoshi Ito and participants of internal ECB seminars are gratefully acknowledged.All opinions expressed in this paper are those of the author only and not those of the European Central Bank or the European System of Central Banks. 2 DG Economics, European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany; e-mail: [email protected] © European Central Bank, 2004 Address Kaiserstrasse 29 60311 Frankfurt am Main, Germany Postal address Postfach 16 03 19 60066 Frankfurt am Main, Germany Telephone +49 69 1344 0 Internet http://www.ecb.int Fax +49 69 1344 6000 Telex 411 144 ecb d All rights reserved. Reproduction for educational and non- commercial purposes is permitted provided that the source is acknowledged. The views expressed in this paper do not necessarily reflect those of the European Central Bank. The statement of purpose for the ECB Working Paper Series is available from the ECB website, http://www.ecb.int. -
Global Market Perspective
Vadim Zlotnikov Chief Market Strategist & Co-Head—Multi-Asset Solutions Global Market Perspective An Alternative Framework for Multi-Asset Diversification Diversifying by time horizon and equity beta may allow investors to benefit from high expected returns to contrarian, multi-asset investment opportunities while reducing drawdown risk. How We’re Positioned and Where the Opportunities Are Highlights Fears of slowing economic growth accelerated during September. Long-term n Continued volatility—from declining expectations for inflation and nominal growth collapsed. The decline was most liquidity as well as decelerating pronounced in the US, but also extended to Europe, Japan and Australia. emerging-market growth and tepid earnings growth—should create bigger mispricings. (continued) n These opportunities are necessarily coupled with drawdown risks that can’t be hedged, because illiquidity and Current Positioning unpredictable government response can amplify short-term losses. Position Trend Overweight Underweight/Short Equities – – Japan, EU Canada, US, Australia n Distress and mispricing are often Comments and Recent Activity: Absence of traditional excesses that mark end of cycle; profit margins to sustain. Modest improvements in credit flows improve Europe, Japan outlook. High volatility, valuation drove underweight thematic, but multi-asset diversifica- Sovereign Bonds 0 Flat US, Australia, Canada Japan, Europe tion may reduce common risk Comments: Low real rates; no exposure to Japanese bonds; overweight CAN, US, AUS sovereigns for higher yields exposures. IG Credit 0/+ Flat n HY Credit 0/+ – Contrarian opportunities today Comments: EM more attractive, but selectivity is key; added on improved valuation include energy/commodity equities, Petroleum + Down Long-Dated Futures, emerging-market investment-grade Oil Services Comments: Supply growth decelerates as capex cuts offset gains from technology. -
Inflation Derivatives: Introduction One of the Latest Developments in Derivatives Markets Are Inflation- Linked Derivatives, Or, Simply, Inflation Derivatives
Inflation-indexed Derivatives Inflation derivatives: introduction One of the latest developments in derivatives markets are inflation- linked derivatives, or, simply, inflation derivatives. The first examples were introduced into the market in 2001. They arose out of the desire of investors for real, inflation-linked returns and hedging rather than nominal returns. Although index-linked bonds are available for those wishing to have such returns, as we’ve observed in other asset classes, inflation derivatives can be tailor- made to suit specific requirements. Volume growth has been rapid during 2003, as shown in Figure 9.4 for the European market. 4000 3000 2000 1000 0 Jul 01 Jul 02 Jul 03 Jan 02 Jan 03 Sep 01 Sep 02 Mar 02 Mar 03 Nov 01 Nov 02 May 01 May 02 May 03 Figure 9.4 Inflation derivatives volumes, 2001-2003 Source: ICAP The UK market, which features a well-developed index-linked cash market, has seen the largest volume of business in inflation derivatives. They have been used by market-makers to hedge inflation-indexed bonds, as well as by corporates who wish to match future liabilities. For instance, the retail company Boots plc added to its portfolio of inflation-linked bonds when it wished to better match its future liabilities in employees’ salaries, which were assumed to rise with inflation. Hence, it entered into a series of 1 Inflation-indexed Derivatives inflation derivatives with Barclays Capital, in which it received a floating-rate, inflation-linked interest rate and paid nominal fixed- rate interest rate. The swaps ranged in maturity from 18 to 28 years, with a total notional amount of £300 million. -
Hicks-Arrow Prices for US Federal Debt 1791-1930
Costs of Financing US Federal Debt: 1791-1933∗ George Hall,† Jonathan Payne,‡ Thomas J. Sargent,§ Bálint Szőke¶ August 26, 2021 Abstract We use computational Bayesian methods to estimate parameters of a statistical model of gold, greenback, and real yield curves for US federal debt from 1791 to 1933. Posterior probability coverage intervals indicate more uncertainty about yields during periods in which data are especially sparse. We detect substantial discrepancies between our approximate yield curves and standard historical series on yields on US federal debt, especially during War of 1812 and Civil War surges in government expenditures that were accompanied by units of account ambiguities. We use our approximate yield curves to describe how long it took to achieve Alexander Hamilton’s goal of reducing default risk premia in US yields by building a reputation for servicing debts as promised. We infer that during the Civil War suspension of convertibility of greenback dollars into gold dollars, US creditors anticipated a rapid post war return to convertibility at par, but that after the war they anticipated a slower return. JEL classification: E31, E43, G12, N21, N41 Key words: Big data, default premia, yield curve, units of account, gold standard, government debt, Hamil- tonian Monte Carlo, Julia, DynamicHMC.jl, pricing errors, specification analysis. ∗We thank Clemens Lehner for outstanding research assistance and Min Wei and audiences at the Minnesota Workshop in Macroeconomic Theory and a University of Sydney seminar for suggestions. The views expressed here are those of the authors and do not necessarily represent the views of the Federal Reserve Board or its staff. -
Consolidated Financial Statements for the Year Ended 31 December 2017 Azimut Holding S.P.A
Consolidated financial statements for the year ended 31 december 2017 Azimut Holding S.p.A. Consolidated financial statements for the year ended 31 december 2017 Azimut Holding S.p.A. 4 Gruppo Azimut Contents Company bodies 7 Azimut group's structure 8 Main indicators 10 Management report 13 Baseline scenario 15 Significant events of the year 19 Azimut Group's financial performance for 2017 25 Main balance sheet figures 28 Information about main Azimut Group companies 32 Key risks and uncertainties 36 Related-party transactions 40 Organisational structure and corporate governance 40 Human resources 40 Research and development 41 Significant events after the reporting date 41 Business outlook 42 Non-financial disclosure 43 Consolidated financial statements 75 Consolidated balance sheet 76 Consolidated income statement 78 Consolidated statement of comprehensive income 79 Consolidated statement of changes in shareholders' equity 80 Consolidated cash flow statement 84 Notes to the consolidated financial statements 87 Part A - Accounting policies 89 Part B - Notes to the consolidated balance sheet 118 Part C - Notes to the consolidated income statement 147 Part D - Other information 159 Certification of the consolidated financial statements 170 5 6 Gruppo Azimut Company bodies Board of Directors Pietro Giuliani Chairman Sergio Albarelli Chief Executive Officer Paolo Martini Co-Managing Director Andrea Aliberti Director Alessandro Zambotti (*) Director Marzio Zocca Director Gerardo Tribuzio (**) Director Susanna Cerini (**) Director Raffaella Pagani Director Antonio Andrea Monari Director Anna Maria Bortolotti Director Renata Ricotti (***) Director Board of Statutory Auditors Vittorio Rocchetti Chairman Costanza Bonelli Standing Auditor Daniele Carlo Trivi Standing Auditor Maria Catalano Alternate Auditor Luca Giovanni Bonanno Alternate Auditor Independent Auditors PricewaterhouseCoopers S.p.A.