Archive for December 2007
Arbitrage is the process of taking advantage of the mis-pricing securities or a price difference between two or more markets. Suppose that the exchange rates between the Euro, US Dollar and Singapore Dollar are as follows:
EUR -USD – 1.4808(buy), 1.5008(sell)
EUR-SGD – 2.0975(buy), 2.1175(sell)
USD-SGD – 1.4472(buy), 1.4672(sell)
This essentially means that the Foreign Exchange firm (say Thomas [...]
I will aim to write and post 1 article every 4-5 days in the near future.I will be writing articles titled :
The Sub-Prime Crisis Demystified
The Fall of the US Dollar : Is the end in sight?
Are Apple and Google Overvalued Stocks ?
The Fundamentals of Diversification
and many more…….
I came across a very interesting article on “Stumble!” called, “Everything You Ever Really Needed to Know About Personal Finance on the Back of Five Business Cards”. It explains the basics of personal money management in a very simple and coherent manner. Very often in life and in our careers, we lose sight of [...]
UBS today announced that it was writing down its sub-prime holdings by a further US$ 10 billion. This brings the total write-down in UBS’s sub-prime holdings to about US$ 13.5 billion making it the biggest loser from the sub-prime crisis. The Swiss banking giant however, managed to raise CHF 13 billion (about US$ 11.5 billion) [...]
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The Basics of Investing:Commodities and Commodity Exchanges
0 Comments | Posted by Ash in Misc
Commodities and Commodity Exchanges
Firstly, let us start off by understanding what commodities are. Commodities are, well commodities – Anything that can be bought and sold relatively easily, something that can physically be moved or stored. In the financial world, it could mean something as simple as gold,silver,oil,timber,sugar,wheat,cotton etc. It could also mean something as complex [...]
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The Basics of Investment Banking: Corporate Credit Products and Interest Rates
0 Comments | Posted by Ash in Investment Banking
Before we go on to explore Interest rate swaps, let us get a rough idea of the playing field. Think for a moment that Intel is setting up a bunch of fabrication plants and research labs in China and needs a 1 billion US$ loanfor that purpose. Let us say that it approaches Citibank and [...]
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The Basics of Investment Banking : Interest Rate Swaps
0 Comments | Posted by Ash in Investment Banking
Moving on to a different example, suppose that Halliburton owes $ 1 billion to a syndicate of banks led by ABN Amro and that the principal amount is repayable after 5 years.Now, assume that the interest is payable annually and the rate is pegged at the 12 month LIBOR + 100 bases points. Suppose the [...]
