Finance

Foreign Exchange Markets (Finance)

Foreign exchange markets are the institutional frameworks within which currencies are bought and sold by individuals, corporations, banks and governments. Trading in currencies no longer occurs in a physical marketplace or in any one country. London, New York, and Tokyo, the major international banking centers in the world, have the largest share of the market, […]

Growth by Acquisition (Finance)

Growth is an imperative for corporations. Growth provides corporations with expanding opportunities enabling them to attract the best executives or motivating workers. Growth is also a means for maintaining or enhancing a firm’s relative competitive position. Avoidance of growth in a market where incumbent rivals are relentlessly seeking to increase their market shares can result […]

Game Theory in Finance

There is a flavor of non-sequential learning games in a well-known saying of Confucius: “Consistency is the virtue of fools and wise people change their minds as they grow wiser.” The formulation of common knowledge is not obvious, but commonly believed to be due to Allmann (1976). However one can also sense the notion of […]

Fuzzy Logic (Finance)

In the last thirty years one of the more controversial introductions into the range of decision-making tools, have been the ideas of fuzzy logic, fuzzy systems, and fuzzy analysis. Conventional set theory expressed in Aristotelian terms has a binary or boolean logic; an object (value) is in a set with a truth value of 1 […]

Insider Trading Law (US) (Finance)

Federal regulation of insider trading occurs through three main sources: Section 16 of the Securities Exchange Act of 1934, Securities and Exchange Commission (SEC) Rule 10b-5, and SEC Rule 14e-3. The SEC rules are enforced by both the SEC and private plaintiffs, while violations of the Securities Exchange Act are crimes that can be prosecuted […]

Initial Public Offerings (IPOS) (Finance)

In contrast to a seasoned offering, an IPO is the offering of shares of a company that are not publicly traded. The most common are IPOs of fixed-income securities, equity securities, warrants, and a combination of equity shares and warrants (“units” ). The term IPO is often used to refer only to equity or unit […]

Hedging (Finance)

The concept hedging has a wide range of applications to real-word problems when there are uncertainties in transactions. Hedging is commonly used by grain dealers, businessmen, and individuals to protect themselves against uncertainties. It serves mainly two purposes: first to enter into forward contracts in order to protect the domestic currency value of foreign currency-denominated […]

International Initial Public Offerings (Finance)

The initial public offering (IPO) of a company’ s equity is a milestone in its life and it denotes a turning point in the relationship between the company and its owners. The main reasons for going public are: (1) to raise additional capital for further expansion; (2) to allow the owners to realize partially or […]

Insurance Derivatives (Finance)

A new feature of the reinsurance market is the use of banking initiatives to supplement or replace reinsurance contracts. Insurance derivatives are tradable insurance contracts. Introduced by the Chicago Board of Trade (CBOT) they are currently restricted to property catastrophe exposures in USA. The derivative contract at the CBOT uses statistics related to premiums and […]

Insurance (Finance)

Insurance is the process through which individual exposures to a risk of loss can be transferred to a pool in exchange for a premium reflecting the average losses from the given risk to that pool. The need for insurance arises because the outcome of both business and individual plans are subject to uncertainty and may […]

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