The cause of the global financial market crisis was a major US housing boom which came to an eventual end with financial institutions incurring significant losses on mortgages and mortgage related assets.
The global credit boom was characterised by a broad underpricing of risk, excessive leverage of financial institutions and increasing reliance on complex and opaque financial instruments which proved to be fragile under stress.Essentially, there was a failure to regulate and supervise the quality of new mortgages being issued in the USA. Various originators and distributors of mortgage debt used creative approaches to fool large institutional investors by obscuring the significant risks involved while over-emphasising the high returns.
The lending proved to be loss making or entailing high risk of loss. A significant part of US mortgages issued in recent years was “toxic” and was sold around the world with ramifications for banking behaviour everywhere.
Hardly any bank is willing to lend to another bank anymore, especially when it involves the exchange of securities, which has been a pillar of inter-bank lending.
Monday, November 17, 2008
Share Market Basics
In finance a share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REIT's. In British English, the usage of the word share alone to refer solely to stocks is so common that it almost replaces the word stock itself.
In simple Words, a share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.
By owning a share you can earn a portion and selling shares you get capital gain. So, your return is the dividend plus the capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price.
A company's stock price reflects what investors think about the stock, not necessarily what the company is "worth." For example, companies that are growing quickly often trade at a higher price than the company might currently be "worth." Stock prices are also affected by all forms of company and market news. Publicly traded companies are required to report quarterly on their financial status and earnings. Market forces and general investor opinions can also affect share price.
Quick Facts on Stocks and Shares
Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues
Over the long run, stocks have historically averaged about 10% annual returns However, stocks offer no
guarantee of any returns and can lose value, even in the long run
Investments in stocks can generate returns through dividends, even if the price
Trading in shares:
Every transaction in the stock exchange is carried out through licensed members called brokers.
To trade in shares, you have to approach a broker However, since most stock exchange brokers deal in very high volumes, they generally do not entertain small investors. These brokers have a network of sub-brokers who provide them with orders.
The general investors should identify a sub-broker for regular trading in shares and palce his order for purchase and sale through the sub-broker. The sub/broker will transmit the order to his broker who will then execute it .
Active Shares:
Shares in which there are frequent and day-to-day dealings, as distinguished from partly active shares in which dealings are not so frequent. Most shares of leading companies would be active, particularly those which are sensitive to economic and political events and are, therefore, subject to sudden price movements. Some market analysts would define active shares as those which are bought and sold at least three times a week. Easy to buy or sell.
In simple Words, a share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.
By owning a share you can earn a portion and selling shares you get capital gain. So, your return is the dividend plus the capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price.
A company's stock price reflects what investors think about the stock, not necessarily what the company is "worth." For example, companies that are growing quickly often trade at a higher price than the company might currently be "worth." Stock prices are also affected by all forms of company and market news. Publicly traded companies are required to report quarterly on their financial status and earnings. Market forces and general investor opinions can also affect share price.
Quick Facts on Stocks and Shares
Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues
Over the long run, stocks have historically averaged about 10% annual returns However, stocks offer no
guarantee of any returns and can lose value, even in the long run
Investments in stocks can generate returns through dividends, even if the price
Trading in shares:
Every transaction in the stock exchange is carried out through licensed members called brokers.
To trade in shares, you have to approach a broker However, since most stock exchange brokers deal in very high volumes, they generally do not entertain small investors. These brokers have a network of sub-brokers who provide them with orders.
The general investors should identify a sub-broker for regular trading in shares and palce his order for purchase and sale through the sub-broker. The sub/broker will transmit the order to his broker who will then execute it .
Active Shares:
Shares in which there are frequent and day-to-day dealings, as distinguished from partly active shares in which dealings are not so frequent. Most shares of leading companies would be active, particularly those which are sensitive to economic and political events and are, therefore, subject to sudden price movements. Some market analysts would define active shares as those which are bought and sold at least three times a week. Easy to buy or sell.
Advantages of an MBA
MBA grads are desirable in any job market, an MBA will give you the opportunities you need to advance in the business world. As today's marketplace evolves and becomes increasingly complex, many employers are choosing to balance their need to retain good employees with their need to fill managerial positions with candidates possessing advanced-level knowledge and skills. They're doing this by sending selected employees to business school - and footing the bill.Here’s a look at what an MBA can do for you and how valuable it actually is.
Business Knowledge:
The MBA program and business schools give you valuable knowledge about business and all its related aspects. You learn about business strategies and concepts, not just on paper, but the training and internship required in an MBA course, teaches you how to use these skills in practical life and in day to day business operations.
Leadership Abilities:
An MBA degree involves rigorous training, assignments, reports, presentations, and group projects; all of which give you the necessary abilities to handle real-life business situations. This helps to set you apart from those who do not have such expertise and can make you a leader in your chosen field.
Networking:
The alliances that you form with your classmates and the network that you create is deemed as one of the most important and valuable things that an MBA program can give you. MBA graduates have often felt that the associations formed during the MBA course are resources that are invaluable and can be drawn upon for years after the MBA degree has been achieved.
Business Knowledge:
The MBA program and business schools give you valuable knowledge about business and all its related aspects. You learn about business strategies and concepts, not just on paper, but the training and internship required in an MBA course, teaches you how to use these skills in practical life and in day to day business operations.
Leadership Abilities:
An MBA degree involves rigorous training, assignments, reports, presentations, and group projects; all of which give you the necessary abilities to handle real-life business situations. This helps to set you apart from those who do not have such expertise and can make you a leader in your chosen field.
Networking:
The alliances that you form with your classmates and the network that you create is deemed as one of the most important and valuable things that an MBA program can give you. MBA graduates have often felt that the associations formed during the MBA course are resources that are invaluable and can be drawn upon for years after the MBA degree has been achieved.
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