CHECK THESE SAMPLES OF The effect of liquidity risk on carry trade returns
The financial instruments used to park excess cash are exposed to lesser market risk as these could be transformed into liquid cash at any point of time.... The risk of investments, however, would also be shared with investors.... The marketable securities for parking excess cash provide a source of high liquidity.... The high liquidity requirement could be met by the corporations by use of marketable securities due to the presence of large number of buyers in the market....
4 Pages
(1000 words)
Essay
hellip; Financial Institutions have developed the tools and techniques with the help of technology which clearly offer a distinctive advantage in terms of profitability as well as total returns earned on investment.... High Frequency Trading is one such innovation wherein firms use sophisticated technology to rapidly trade securities.... Though the overall number of firms using HFT is relatively low however, the overall volume of trade showed erratic trends with rapid increase as well as decrease in the overall trading activity....
23 Pages
(5750 words)
Essay
MNEs have to ensure that they develop strategies that minimise the risk of the investment and that brings the most returns.... International finance and trade would completely be halted if money is removed from the equation.... Most people prefer to carry out business within their regional block because of the several advantages that come with globalisation such as limited restrictions to trade or limited tariffs.... MNEs therefore have to carry out a study of the host countries and evaluate the circumstances there before setting up businesses there....
8 Pages
(2000 words)
Essay
International operation and risk management of ICAP plc Contents Contents 2 Introduction: ICAP plc 3 Performance - Financial Trend 3 Globalization strategies 8 Managing Risks 10 Foreign Exchange risk 10 Country and Political risk 11 Recommendation for the management of different types of Risks 13 Conclusion 14 References 15 Bibliography 18 Introduction: ICAP plc ICAP plc is an electronic and voice dealer broking company that is based in the UK....
10 Pages
(2500 words)
Essay
hellip; The risk attributes of a derivative contract can be translated directly into a respective cash equivalent, interest rate or other risk exposure in the global market.... Actual and target risk exposure is based on the assumption of accurate specification of the pricing model.... The paper "Risks and Benefits of Derivative Contracts" highlights that liquidity refers to a facility whose specific financial instrument can be measured based on time and costs, and can be traded....
7 Pages
(1750 words)
Coursework
In the banking sector, the issue of liquidity risk occurs in a distinct and unique manner.... This will culminate in the evaluation of a realistic… liquidity risk in general refers to a situation whereby an asset cannot be traded quickly enough to make gains rather than a loss (Laycock, 2014).... There is also the market liquidity risk which revolves around the ability of a bank to settle its obligations to stakeholders on the market.... This is described as the risk of overcapitalisation and it occurs when an organisation holds a lot of assets, but lacks the ability to convert the assets into cash in the short-run....
6 Pages
(1500 words)
Essay
Conversely, a bank becomes illiquid in the event that it is unable to meet its financial risk on time.... The measure to the liquidity risk helps in assessing the interactions of the market liquidity and the funding liquidity risk that are key concerns to most economic policy makers.... In this case, therefore, it is paramount to realize that funding liquidity risk for the bank is driven by the possibility that a bank may find itself at a position where it is unable to settle its financial obligations on the due time....
5 Pages
(1250 words)
Essay
ETFs closely follow the NAV of the underlying portfolio, this is in stark contrast to the CEFs who do not trade near to their NAV.... Open-ended funds are not listed in the stock market because they themselves provide the liquidity by offering to buy and selling prices....
12 Pages
(3000 words)
Term Paper
