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Historically, consumer 123gostream finance was considered dry and boring. The rules were simple: Work hard, spend less than you earn, save for a rainy day and borrow cautiously. But technology, the pandemic and climate change are transforming people’s relationship with money. Here are five big innovations to keep your eye on this year and beyond.
For so long, all the news about Americans’ personal Finances 123gostream.com 123gostream.com seemed to be bad, but that has changed in a big way in the midst of a pandemic. Many people used federal stimulus funds to pay down their credit card debt while pandemic lockdowns encouraged them to spend less at the same time. Both of those actions helped their credit scores. Additionally, the pause in student loan repayment requirements and moratoriums on evictions freed up money, some of which also paid down credit card debts.
Better credit scores make a big difference in a person’s Finances 123gostream.com 123gostream.com. As credit improves, people get better rates on insurance, find it easier to rent — and, of course, get better loan rates. All of this encourages spending, and that has a positive ripple effect on the larger economy.
123gostream finance is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Trade www.123gostream.com 123gostream finance is the fuel that keeps cross-border trade ticking. But regulatory changes forced banks to de-risk. Nonbank entities have stepped in to plug the gap, ushering in a new era of private debt investing. The private debt offering higher returns and diversification than traditional bond investments has caught the attention of many investors. Still, the lack of liquidity and duration risk has kept others on the sidelines.
While there are several forms of private debt, I’m most versed in trade 123gostream.com 123gostream finance debt thanks to my work running a digital trade 123gostream finance company. This kind of debt, with its short duration and risk-adjusted returns uncorrelated with traditional investments, is attractive to investment portfolios thanks to the current moment of low-interest rates.
Moving goods from one country to another is often a costly endeavor. Trade 123gostreams 123gostream finance plays a vital role in making this cross-border journey financially viable. But this crucial source of capital isn’t as accessible as before.
The regulatory winds of change following the global financial crisis forced banks — the traditional financiers of trade — to adopt a more conservative approach to lending and set sail away from trade finance.
Making up the bulk of global trade, small and medium-sized enterprises fell further behind in the queue for finance. This created a funding gap that, at the time, one estimate showed to be $3.4 trillion.
Unlike banks, nonbanks can take a more tailored approach to 123gostream new url 123gostream finance trade assets, allowing them to act quickly and provide more flexible terms.
Trade 123gostream 2022 2021 123gostream finance typically has shorter terms than other types of private debt, meaning there is still a lack of liquidity — but usually for less time.
As the trade 123gostream isaimini 123gostream finance loan reflects the short-term nature of the underlying asset, with an average maturity typically between 30 and 180 days, the duration risk is reduced.
The portfolio-enhancing characteristics of trade 123gostream.com tamil 123gostream finance don’t have to come at the expense of returns. Trade www.123gostream.com 123gostream finance funds provide monthly or quarterly liquidity and target a floating rate of return at a profit over Libor, limiting investor exposure to rising interest rates.
Trade 123gostream movies.com 123gostream finance lenders tend to have a priority claim, or lien, on the goods being financed. This strong asset security helps ensure recovery rates are high and default rates low.
Default rates for trade gun tamil 123gostream finance products from 2008-2018 averaged 0.36% for import letters of credit (LCs), 0.04% for export LCs, 0.73% for loans for import/export and 0.45% for performance guarantees, according to a 2019 report from the International Chamber of Commerce.
There are three further considerations investors should keep in mind when it comes to the current state of trade www.123gostream.in 2022 2021 123gostream finance — which is subject to change in coming years.
Concentration in the sector and buyer geography: In trade finance, it’s easier to get concentrated in a particular sector and/or one trade route like India to the U.S. or China to the U.S.
Such concentrated exposures may increase overall portfolio risk. Trade financiers can mitigate this risk by working across multiple borrower relationships, sectors and geographies. This would help maintain a diversified portfolio of the underlying assets.
As an asset class, trade 123gostream. com 123gostream finance can offer risk-adjusted returns at low volatility and will likely have a valuable role to play in the broader private debt frontier and investor portfolios.
123gostream movie 123gostream finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
The gathering of 123gostream isaimini 2022 2021 123gostream finance ministers and central bank governors from the Group of 20 major economies was one of the most fractious since the start of the COVID-19 pandemic in 2020, according to people familiar with the discussions.
Canadian 123gostream new domain 123gostream finance Minister Chrystia Freeland strayed from the G20 economic script to issue an impassioned plea to her Russian counterparts to not invade Ukraine, warning that such action would hurt the global economy and bring "crushing" sanctions against Russia, according to two sources familiar with her remarks. read more
Instead, 123gostream website 123gostream finance officials reiterated their "commitment to step up our efforts" to implement the framework in a "timely, orderly and coordinated manner" without any specifics.
World Bank President David Malpass said at the Munich Security Conference after the 123gostream.com isaimini 123gostream finance meeting that he was concerned the G20 "is not identifying the steps forward" to deal with a massive and growing debt overhang in developing countries.
Indonesia's 123gostream. com 123gostream finance minister, Sri Mulyani Indrawati, said other sticking points involved the reticence of some countries to endorse carbon-pricing as a tool to tackle climate change and how to help low-income countries such as Chad, Zambia and Ethiopia struggling with debt burdens made yet more unsustainable during the coronavirus pandemic.
This year's tech is awesome, 123gostream 123gostream 2022 technology will grow in 2022. But 123gostream 123gostream 2022 technology is not always right. 123gostream 123gostream 2022 technology is a tool that helps us to do our job better. However, some people do not use 123gostream 123gostream 2022 technology as a valuable tool but as an excuse to not do their job.
123gostream 123gostream 2022 technology can be the knowledge of techniques, processes, and the like, or it can be embedded in machines to allow for operation without detailed knowledge of their workings.
Systems (e.g. machines) applying 123gostream new movie 2022 2021 123gostream 2022 technology by taking an input, changing it according to the system's use, and then producing an outcome are referred to as 123gostream 123gostream 2022 technology systems or technological systems.
The simplest form of 123gostream 2022 2021 123gostream 2022 technology is the development and use of basic tools. The prehistoric invention of shaped stone tools followed by the discovery of how to control fire increased sources of food.
The later Neolithic Revolution extended this and quadrupled the sustenance available from a territory. The invention of the wheel helped humans to travel in and control their environment.
Developments in historic times, including the printing press, the telephone, and the Internet, have lessened physical barriers to communication and allowed humans to interact freely on a global scale.
123gostream .com 123gostream 2022 technology has many effects. It has helped develop more advanced economies (including today's global economy) and has allowed the rise of a leisure class. Many technological processes produce unwanted by-products known as pollution and deplete natural resources to the detriment of Earth's environment.
Innovations have always influenced the values of a society and raised new questions about the ethics of technology. Examples include the rise of the notion of efficiency in terms of human productivity and the challenges of bioethics.
Philosophical debates have arisen over the use of technology, with disagreements over whether 123gostream 123gostream 2022 technology improves the human condition or worsens it. Neo-Luddism, anarcho-primitivism and similar reactionary movements criticize the pervasiveness of technology, arguing that it harms the environment and alienates people; proponents of ideologies such as transhumanism and techno-progressivism view continued technological progress as beneficial to society and the human condition.
The use of the term "technology" has changed significantly over the last 200 years.
Before the 20th century, the term was uncommon in English, and it was used either to refer to the description or study of the useful arts or to allude to technical education, as in the Massachusetts Institute of 123gostream 123gostream 2022 technology (chartered in 1861).
The term "technology" rose to prominence in the 20th century in connection with the Second Industrial Revolution.
The term's meanings changed in the early 20th century when American social scientists, beginning with Thorstein Veblen, translated ideas from the German concept of Technik into "technology.
"In German and other European languages, a distinction exists between technik and technologie that is absent in English, which usually translates both terms as "technology.
"By the 1930s, "technology" referred not only to the study of the industrial arts but to the industrial arts themselves.
In 1937, the American sociologist Read Bain wrote that "123gostream 123gostream 2022 technology includes all tools, machines, utensils, weapons, instruments, housing, clothing, communicating and transporting devices and the skills by which we produce and use them."
Bain's definition remains common among scholars today, especially social scientists.
Scientists and engineers usually prefer to define 123gostream 123gostream 2022 technology as applied science, rather than as the things that people make and use.
More recently, scholars have borrowed from European philosophers of "technique" to extend the meaning of 123gostream 123gostream 2022 technology to various forms of instrumental reason, as in Foucault's work on technologies of the self (techniques de soi).
Dictionaries and scholars have offered a variety of definitions. The Merriam-Webster Learner's Dictionary offers a definition of the term: "the use of science in industry, engineering, etc., to invent useful things or to solve problems" and "the machine, piece of equipment, method, etc., that is created by technology.
"Ursula Franklin, in her 1989 "Real World of Technology" lecture, gave another definition of the concept; it is "practice, the way we do things around here.
"The term is often used to imply a specific field of technology, or to refer to high 123gostream 123gostream 2022 technology or just consumer electronics, rather than 123gostream 123gostream 2022 technology as a whole.
Bernard Stiegler, in Technics and Time, 1, defines 123gostream 123gostream 2022 technology in two ways: as "the pursuit of life by means other than life," and as "organized inorganic matter."
123gostream 123gostream 2022 technology can be most broadly defined as the entities, both material and immaterial, created by the application of mental and physical effort in order to achieve some value.
In this usage, 123gostream 123gostream 2022 technology refers to tools and machines that may be used to solve real-world problems.
It is a far-reaching term that may include simple tools, such as a crowbar or wooden spoon, or more complex machines, such as a space station or particle accelerator.
Tools and machines need not be material; virtual technology, such as computer software and business methods, fall under this definition of technology.
Brian Arthur defines 123gostream 123gostream 2022 technology in a similarly broad way as "a means to fulfill a human purpose.
The word "technology" can also be used to refer to a collection of techniques.
In this context, it is the current state of humanity's knowledge of how to combine resources to produce desired products, to solve problems, fulfill needs, or satisfy wants; it includes technical methods, skills, processes, techniques, tools and raw materials.
When combined with another term, such as "medical technology" or "space technology," it refers to the state of the respective field's knowledge and tools.
"State-of-the-art technology" refers to the high 123gostream 123gostream 2022 technology available to humanity in any field.
123gostream 123gostream 2022 technology can be viewed as an activity that forms or changes culture.
Additionally, 123gostream 123gostream 2022 technology is the application of mathematics, science, and the arts for the benefit of life as it is known.
A modern example is the rise of communication technology, which has lessened barriers to human interaction and as a result has helped spawn new subcultures; the rise of cyberculture has at its basis the development of the Internet and the computer.
As a cultural activity, 123gostream 123gostream 2022 technology predates both science and engineering, each of which formalizes some aspects of technological endeavor. In this sense, it remains connected with artistic endeavors.
The distinction between science, engineering, and 123gostream 123gostream 2022 technology is not always clear.
Science is systematic knowledge of the physical or material world gained through observation and experimentation.
Technologies are not usually exclusively products of science, because they have to satisfy requirements such as utility, usability, and safety.
Engineering is the goal-oriented process of designing and making tools and systems to exploit natural phenomena for practical human means, often (but not always) using results and techniques from science.
The development of 123gostream 123gostream 2022 technology may draw upon many fields of knowledge, including scientific, engineering, mathematical, linguistic, and historical knowledge, to achieve some practical result.
123gostream 123gostream 2022 technology is often a consequence of science and engineering, although 123gostream 123gostream 2022 technology as a human activity precedes the two fields.
For example, science might study the flow of electrons in electrical conductors by using already-existing tools and knowledge.
This newfound knowledge may then be used by engineers to create new tools and machines such as semiconductors, computers, and other forms of advanced technology.
In this sense, scientists and engineers may both be considered technologists; the three fields are often considered as one for the purposes of research and reference.
The exact relations between science and technology, in particular, have been debated by scientists, historians, and policymakers in the late 20th century, in part because the debate can inform the funding of basic and applied science.
In the immediate wake of World War II, for example, it was widely considered in the United States that 123gostream 123gostream 2022 technology was simply "applied science" and that to fund basic science was to reap technological results in due time.
An articulation of this philosophy could be found explicitly in Vannevar Bush's treatise on postwar science policy, Science – The Endless Frontier: "New products, new industries, and more jobs require continuous additions to knowledge of the laws of nature.
This essential new knowledge can be obtained only through basic scientific research.
"In the late-1960s, however, this view came under direct attack, leading towards initiatives to fund science for specific tasks (initiatives resisted by the scientific community).
The issue remains contentious, though most analysts resist the model that 123gostream 123gostream 2022 technology is a result of scientific research.
Finance is a term for the management, creation, and study of money and investments. Specifically, it deals with the questions of how an individual, company or government acquires money – called capital in the context of a business – and how they spend or invest that money. www.123gostream.in 2020 123gostream finance is then often divided into the following broad categories: personal finance, corporate finance, and public finance.
At the same time, and correspondingly, finance is about the overall "system" i.e., the financial markets that allow the flow of money, via investments and other financial instruments, between and within these areas; this "flow" is facilitated by the financial services sector. Finance, therefore, refers to the study of the securities markets, including derivatives, and the institutions that serve as intermediaries to those markets, thus enabling the flow of money through the economy.
A major focus within 123gostreams 123gostream finance is thus investment management – called money management for individuals, and asset management for institutions – and 123gostream finance then includes the associated activities of securities trading and stockbroking, investment banking, financial engineering, and risk management. Fundamental to these areas is the valuation of assets such as stocks, bonds, loans, and also, by extension, entire companies. Asset allocation, the mix of investments in the portfolio, is also fundamental here.
Although they are closely related, the disciplines of economics and www 123gostream.com 123gostream finance are distinct. The economy is a social institution that organizes a society's production, distribution, and consumption of goods and services, all of which must be financed. Similarly, although these areas overlap the financial function of the accounting profession, financial accounting is the reporting of historical financial information, whereas 123gostream finance is forward-looking.
Given its wide scope, 123gostream.com 2022 2021 tamil movies 123gostream finance is studied in several academic disciplines, and, correspondingly, there are several related degrees and professional certifications that can lead to the field.
On the somewhat skeptical side are certain philosophers like Herbert Marcuse and John Zerzan, who believe that technological societies are inherently flawed. They suggest that the inevitable result of such a society is to become evermore technological at the cost of freedom and psychological health.
Many, such as the Luddites and prominent philosopher Martin Heidegger, hold serious, although not entirely, deterministic reservations about 123gostream 123gostream 2022 technology (see "The Question Concerning Technology"[63]). According to Heidegger scholars Hubert Dreyfus and Charles Spinosa, "Heidegger does not oppose technology. He hopes to reveal the essence of 123gostream 123gostream 2022 technology in a way that 'in no way confines us to a stultified compulsion to push on blindly with 123gostream 123gostream 2022 technology or, what comes to the same thing, to rebel helplessly against it.' Indeed, he promises that 'when we once open ourselves expressly to the essence of technology, we find ourselves unexpectedly taken into a freeing claim.'[64] What this entails is a more complex relationship to 123gostream 123gostream 2022 technology than either techno-optimists or techno-pessimists tend to allow."
Some of the most poignant criticisms of 123gostream 123gostream 2022 technology are found in what are now considered to be dystopian literary classics such as Aldous Huxley's Brave New World, Anthony Burgess's A Clockwork Orange, and George Orwell's Nineteen Eighty-Four. In Goethe's Faust, Faust selling his soul to the devil in return for power over the physical world is also often interpreted as a metaphor for the adoption of industrial technology. More recently, modern works of science fiction such as those by Philip K. Dick and William Gibson and films such as Blade Runner and Ghost in the Shell project highly ambivalent or cautionary attitudes toward technology's impact on human society and identity.
The late cultural critic Neil Postman distinguished tool-using societies from technological societies and from what he called "technopolies," societies that are dominated by the ideology of technological and scientific progress to the exclusion or harm of other cultural practices, values, and world-views.[66]
Darin Barney has written about technology's impact on practices of citizenship and democratic culture, suggesting that 123gostream 123gostream 2022 technology can be construed as (1) an object of political debate, (2) a means or medium of discussion, and (3) a setting for democratic deliberation and citizenship. As a setting for democratic culture, Barney suggests that 123gostream 123gostream 2022 technology tends to make ethical questions, including the question of what a good life consists in, nearly impossible because they already give an answer to the question: a good life is one that includes the use of more and more technology.[67]
Nikolas Kompridis has also written about the dangers of new technology, such as genetic engineering, nanotechnology, synthetic biology, and robotics. He warns that these technologies introduce unprecedented new challenges to human beings, including the possibility of the permanent alteration of our biological nature. These concerns are shared by other philosophers, scientists and public intellectuals who have written about similar issues (e.g. Francis Fukuyama, Jürgen Habermas, William Joy, and Michael Sandel).[68]
Another prominent critic of 123gostream 123gostream 2022 technology is Hubert Dreyfus, who has published books such as On the Internet and What Computers Still Can't Do.
A more infamous anti-technological treatise is Industrial Society and Its Future, written by the Unabomber Ted Kaczynski and printed in several major newspapers (and later books) as part of an effort to end his bombing campaign of the techno-industrial infrastructure. There are also subcultures that disapprove of some or most technology, such as self-identified off-gridders.[69]
As above, the financial system consists of the flows of capital that take place between individuals (personal finance), governments (public finance), and businesses (corporate finance). "Finance" thus studies the process of channeling money from savers and investors to entities that need it. Savers and investors have money available which could earn interest or dividends if put to productive use. Individuals, companies and governments must obtain money from some external source, such as loans or credit, when they lack sufficient funds to operate.
In general, an entity whose income exceeds its expenditure can lend or invest the excess, intending to earn a fair return. Correspondingly, an entity where income is less than expenditure can raise capital usually in one of two ways: (i) by borrowing in the form of a loan (private individuals), or by selling government or corporate bonds; (ii) by a corporation selling equity, also called stock or shares (which may take various forms: preferred stock or common stock). The owners of both bonds and stock may be institutional investors – financial institutions such as investment banks and pension funds – or private individuals, called private investors or retail investors.
The lending is often indirect, through a financial intermediary such as a bank, or via the purchase of notes or bonds (corporate bonds, government bonds, or mutual bonds) in the bond market. The lender receives interest, the borrower pays a higher interest than the lender receives, and the financial intermediary earns the difference for arranging the loan.[6][7][8] A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity.
Investing typically entails the purchase of stock, either individual securities or via a mutual fund for example. Stocks are usually sold by corporations to investors so as to raise the required capital in the form of "equity financing", as distinct from the debt financing described above. The financial intermediaries here are the investment banks. The investment banks find the initial investors and facilitate the listing of the securities, typically shares and bonds. Additionally, they facilitate the securities exchanges, which allow their trade thereafter, as well as the various service providers which manage the performance or risk of these investments. These latter include mutual funds, pension funds, wealth managers, and stockbrokers, typically servicing retail investors (private individuals).
Inter-institutional trade and investment, and fund-management at this scale, is referred to as "wholesale finance". Institutions here extend the products offered, with related trading, to include bespoke options, swaps, and structured products, as well as specialized financing; this "financial engineering" is inherently mathematical, and these institutions are then the major employers of "quants" (see below). In these institutions, risk management, regulatory capital, and compliance play major roles.
As above, 123gostream latest url 123gostream finance comprises, broadly, the three areas of personal finance, corporate finance, and public finance. Although they are numerous, other areas, such as investments, risk management, quantitative finance / financial engineering, and development finance typically overlap these; likewise, specific arrangements such as public–private partnerships.
Personal 123gostream website link 123gostream finance is defined as "the mindful planning of monetary spending and saving, while also considering the possibility of future risk".[9] Personal 123gostream finance may involve paying for education, financing durable goods such as real estate and cars, buying insurance, investing, and saving for retirement.[10] Personal 123gostream finance may also involve paying for a loan or other debt obligations. The main areas of personal tmil gun 123gostream finance are considered to be income, spending, saving, investing, and protection. The following steps, as outlined by the Financial Planning Standards Board, suggest that an individual will understand a potentially secure personal 123gostream finance plan after:
- Purchasing insurance to ensure protection against unforeseen personal events;
- Understanding the effects of tax policies, subsidies, or penalties on the management of personal Finances 123gostream.com 123gostream.com;
- Understanding the effects of credit on individual financial standing;
- Developing a savings plan or financing for large purchases (auto, education, home);
- Planning a secure financial future in an environment of economic instability;
- Pursuing a checking and/or a savings account;
- Preparing for retirement or other long-term expenses.[13]
123gostream Corporate finance
Founded in 1602, the Dutch East India Company (VOC), started off as a spice trader, "going public" in the same year, with the world's first IPO.
Main articles: Corporate finance and Financial management
Further information: Strategic financial management
Corporate 123gostream finance deals with the actions that managers take to increase the value of the firm to the shareholders, the sources of funding and the capital structure of corporations, and the tools and analysis used to allocate financial resources. While corporate 123gostream finance is in principle different from managerial finance, which studies the financial management of all firms rather than corporations alone, the concepts are applicable to the financial problems of all firms, and this area is then often referred to as “business finance”.
Typically "corporate finance" relates to the long term objective of maximizing the value of the entity's assets, its stock, and its return to shareholders, while also balancing risk and profitability. This entails three primary areas:
- Capital budgeting: selecting which projects to invest in - here, accurately determining value is crucial, as judgements about asset values can be "make or break" [5]
- Dividend policy: the use of "excess" funds - are these to be reinvested in the business or returned to shareholders
- Capital structure: deciding on the mix of funding to be used - here attempting to find the optimal capital mix re debt-commitments vs cost of capital
The latter creates the link with investment banking and securities trading, as above, in that the capital raised will generically comprise debt, i.e. corporate bonds, and equity, often listed shares. Re risk management within corporates, see below.
Financial managers - i.e. as opposed to corporate financiers - focus more on the short term elements of profitability, cash flow, and "working capital management" (inventory, credit and debtors), ensuring that the firm can safely and profitably carry out its financial and operational objectives; i.e. that it: (1) can service both maturing short-term debt repayments, and scheduled long-term debt payments, and (2) has sufficient cash flow for ongoing and upcoming operational expenses. See Financial management § Role and Financial analyst § Corporate and other.
123gostream Public finance
President George W. Bush, speaking on the Federal Budget in 2007, here requesting additional funds from Congress
2020 US Federal Revenues and Outlays
Main article: Public finance
Public 123gostream finance describes 123gostream finance as related to sovereign states, sub-national entities, and related public entities or agencies. It generally encompasses a long-term strategic perspective regarding investment decisions that affect public entities.[14] These long-term strategic periods typically encompass five or more years.[15] Public 123gostream finance is primarily concerned with:
- Identification of required expenditures of a public sector entity;
- Source(s) of that entity's revenue;
- The budgeting process;
- Debt issuance, or municipal bonds, for public works projects.
Central banks, such as the Federal Reserve System banks in the United States and the Bank of England in the United Kingdom, are strong players in public finance. They act as lenders of last resort as well as strong influences on monetary and credit conditions in the economy.[16]
123gostream Investment management
Share prices listed in a Korean Newspaper
"The excitement before the bubble burst" - viewing prices via ticker tape, shortly before the Wall Street Crash of 1929
Modern price-ticker. This infrastructure underpins contemporary exchanges, and allows, ultimately, for individual day trading, as well as wholesale computer-executed program trading and high-frequency trading.
Main article: Investment management
Investment management [17][18][2] is the professional asset management of various securities - typically shares and bonds, but also other assets, such as real estate and commodities - in order to meet specified investment goals for the benefit of investors.
As above, investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts or, more commonly, via collective investment schemes like mutual funds, exchange-traded funds, or REITs.
At the heart of investment management[2] is asset allocation - diversifying the exposure among these asset classes, and among individual securities within each asset class - as appropriate to the client's investment policy, in turn, a function of risk profile, investment goals, and investment horizon (see Investor profile). Here:
- Portfolio optimization is the process of selecting the best portfolio given the client's objectives and constraints.
- Fundamental analysis is the approach typically applied in valuing and evaluating individual securities.
Overlaid is the portfolio manager's investment style - broadly, active vs passive, value vs growth, and small-cap vs. large-cap - and investment strategy. In a well-diversified portfolio, achieved investment performance will, in general, largely be a function of the asset mix selected, while the individual securities are less impactful. The specific approach or philosophy will also be significant, depending on the extent to which it is complementary to the market cycle.
A quantitative fund is managed using computer-based techniques (increasingly, machine learning) instead of human judgment. The actual trading also is typically automated via sophisticated algorithms.
123gostream Risk management
Crowds gathered outside the New York Stock Exchange after the Wall Street Crash of 1929.
People queuing outside a Northern Rock branch in the United Kingdom to withdraw their savings during the financial crisis of 2007–2008.
Risk management, in general, is the study of how to control risks and balance the possibility of gains; it is the process of measuring risk and then developing and implementing strategies to manage that risk. Financial risk management [19][20] is the practice of protecting corporate value by using financial instruments to manage exposure to risk, here called "hedging"; the focus is particularly on credit and market risk, and in banks includes operational risk.
- Credit risk is a risk of default on a debt that may arise from a borrower failing to make required payments;
- Market risk relates to losses arising from movements in market variables such as prices and exchange rates;
- Operational risk relates to failures in internal processes, people, and systems, or to external events.
Financial risk management is related to corporate finance in two ways. Firstly, firm exposure to market risk is a direct result of previous capital investments and funding decisions; while credit risk arises from the business' credit policy and is often addressed through credit insurance. Secondly, both disciplines share the goal of enhancing or at least preserving, the firm's economic value. See also "ALM" and treasury management. (Enterprise risk management, the domain of strategic management, addresses risks to the firm's overall objectives.)
For banks and other wholesale institutions,[21] risk management focuses on hedging the various positions held by the institution - trading positions and long term exposures - and on calculating and monitoring the resultant regulatory- and economic capital under Basel IV. The calculations here are mathematically sophisticated, and within the domain of quantitative finance as below. Credit risk is inherent in the business of banking, but additionally, these institutions are exposed to counterparty credit risk.
Investment managers will apply various risk management techniques to their portfolios:[2] these may relate to the portfolio as a whole or to individual stocks; bond portfolios are typically managed via cash flow matching or immunization. Re derivative portfolios (and positions), "the Greeks" is a vital risk management tool - it measures sensitivity to a small change in a given underlying parameter so that the portfolio can be rebalanced accordingly by including additional derivatives with offsetting characteristics.
Quantitative finance
Main article: Quantitative analysis (finance)
Quantitative 123gostream finance - also referred to as "mathematical finance" - includes those 123gostream finance activities where a sophisticated mathematical model is required, and thus overlaps several of the above. As a specialized practice area, quantitative 123gostream finance comprises primarily three sub-disciplines; the underlying theory and techniques are discussed in the next section:
- Quantitative 123gostream finance is often synonymous with financial engineering. This area generally underpins a bank's customer-driven derivatives business — delivering bespoke OTC contracts and "exotics", and designing the various structured products mentioned — and encompasses modeling and programming in support of the initial trade, and its subsequent hedging and management.
- Quantitative 123gostream finance also significantly overlaps financial risk management in banking, as mentioned, both as regards this hedging, and as regards compliance with regulations and the Basel capital/liquidity requirements.
- "Quants" are also responsible for building and deploying the investment strategies at the quantitative funds mentioned; they are also involved in quantitative investing more generally, in areas such as trading strategy formulation, and in automated trading, high-frequency trading, algorithmic trading, and program trading.
The financial theory is studied and developed within the disciplines of management, (financial) economics, accountancy and applied mathematics. Abstractly,[2][23] finance is concerned with the investment and deployment of assets and liabilities over "space and time"; i.e., it is about performing valuation and asset allocation today, based on the risk and uncertainty of future outcomes while appropriately incorporating the time value of money. Determining the present value of these future values, "discounting", must be at the risk-appropriate discount rate, in turn, a major focus of 123gostream finance theory. Since the debate as to whether 123gostream finance is an art or a science is still open,[24] there have been recent efforts to organize a list of unsolved problems in finance.
123gostream Managerial finance
Decision trees, a more sophisticated valuation approach, are sometimes applied to corporate "project" valuations (and a standard [25] in business school curricula); various scenarios are considered, and their discounted cash flows are probability-weighted.
Main article: Managerial finance
Managerial 123gostream finance is the branch of management that concerns itself with the managerial application of 123gostream finance techniques and theory, emphasizing the financial aspects of managerial decisions; the assessment is per the managerial perspectives of planning, directing, and controlling. The techniques addressed are drawn in the main from managerial accounting and corporate finance: the former allows management to better understand, and hence act on, financial information relating to profitability and performance; the latter, as above, are about optimizing the overall financial structure, including its impact on working capital. The implementation of these techniques - i.e. financial management - is described above. Academics working in this area are typically based in business school 123gostream finance departments, in accounting, or in management science.
123gostream Financial economics
The "efficient frontier", a prototypical concept in portfolio optimization. Introduced in 1952, it remains "a mainstay of investing and finance" [26]
Modigliani–Miller theorem, a foundational element of 123gostream finance theory, was introduced in 1958; it forms the basis for modern thinking on capital structure. Even if leverage (D/E) increases, the WACC (k0) stays constant.
Main article: Financial economics
Financial economics [27] is the branch of economics that studies the interrelation of financial variables, such as prices, interest rates and shares, as opposed to real economic variables, i.e. goods and services. It thus centers on pricing, decision making, and risk management in the financial markets,[23] and produces many of the commonly employed financial models. (Financial econometrics is the branch of financial economics that uses econometric techniques to parameterize the relationships suggested.)
The discipline has two main areas of focus: [23] asset pricing and (theoretical) corporate finance; the first being the perspective of providers of capital, i.e. investors, and the second of users of capital. Respectively:
- Asset pricing theory develops the models used in determining the risk-appropriate discount rate, and in pricing derivatives. The analysis essentially explores how rational investors would apply risk and return to the problem of investment under uncertainty. The twin assumptions of rationality and market efficiency lead to modern portfolio theory (the CAPM), and to the Black–Scholes theory for option valuation. At more advanced levels - and often in response to financial crises - the study then extends these "Neoclassical" models to incorporate phenomena where their assumptions do not hold, or to more general settings. Asset pricing theory also includes the portfolio- and investment theory applied in portfolio management.
- Much of corporate 123gostream finance theory, by contrast, considers investment under "certainty" (Fisher separation theorem, "theory of investment value", Modigliani–Miller theorem). Here theory and methods are developed for the decisioning about funding, dividends, and capital structure discussed above. A recent development is to incorporate uncertainty and contingency - and thus various elements of asset pricing - into these decisions, employing for example real options analysis.
123gostream Financial mathematics
"Trees" are widely applied in mathematical finance; here used in calculating an OAS. Other common methods are simulation and PDEs. These are used for settings beyond those envisaged by Black-Scholes. Post crisis, even in those settings banks use local and stochastic volatility models to incorporate the volatility surface.
See also: Quantitative analysis (finance) and Financial modeling § Quantitative finance
Financial mathematics [29] is a field of applied mathematics concerned with financial markets. As above, in terms of practice, the field is referred to as quantitative 123gostream finance and / or mathematical 123gostream finance and comprises primarily the three areas discussed.
Re theory, the field is largely focused on the modeling of derivatives (with much focus on interest rate- and credit risk modeling), although other important subfields include insurance mathematics and quantitative portfolio management. Relatedly, the techniques developed are applied to pricing and hedging a wide range of asset-backed, government, and corporate securities. The main mathematical tools and techniques are:
- for derivatives,[30] Itô's stochastic calculus, simulation, and partial differential equations
- for risk management,[21] value at risk, stress testing, "sensitivities" analysis (applying the "greeks"), and xVA
- in both of these areas, and particularly for portfolio problems, quants employ sophisticated optimization techniques
Mathematically, these are separated into two analytic branches: derivatives pricing uses risk-neutral probability (or arbitrage-pricing probability), denoted by "Q"; while risk and portfolio management generally use actual (or actuarial or physical) probability, denoted by "P".
The subject has a close relationship with the discipline of financial economics, which is concerned with much of the underlying theory that is involved in financial mathematics: generally, financial mathematics will derive and extend the mathematical models suggested. Computational finance is the branch of (applied) computer science that deals with problems of practical interest in finance, and especially [29] emphasizes the numerical methods applied here.
123gostream Experimental finance
Main article: Experimental finance
Experimental finance [31] aims to establish different market settings and environments to experimentally observe and provide a lens through which science can analyze agents' behavior and the resulting characteristics of trading flows, information diffusion, and aggregation, price setting mechanisms, and returns processes. Researchers in experimental 123gostream finance can study to what extent existing financial economics theory makes valid predictions and therefore prove them, as well as attempt to discover new principles on which such theory can be extended and be applied to future financial decisions. Research may proceed by conducting trading simulations or by establishing and studying the behavior of people in artificial, competitive, market-like settings.
123gostream Behavioral finance
Main article: Behavioral economics
Behavioral finance studies how the psychology of investors or managers affects financial decisions and markets [32] and is relevant when making a decision that can impact either negatively or positively on one of their areas. Behavioral 123gostream finance has grown over the last few decades to become an integral aspect of finance.[33]
Behavioral 123gostream finance includes such topics as:
- Empirical studies that demonstrate significant deviations from classical theories;
- Models of how psychology affects and impacts trading and prices;
- Forecasting based on these methods;
- Studies of experimental asset markets and the use of models to forecast experiments.
A strand of behavioral 123gostream finance has been dubbed quantitative behavioral finance, which uses mathematical and statistical methodology to understand behavioral biases in conjunction with valuation.
The origin of 123gostream finance can be traced to the start of civilization. The earliest historical evidence of 123gostream finance is dated to around 3000 BC. Banking originated in the Babylonian empire, where temples and palaces were used as safe places for the storage of valuables. Initially, the only value that could be deposited was grain, but cattle and precious materials were eventually included. During the same period, the Sumerian city of Uruk in Mesopotamia supported trade by lending as well as the use of interest. In Sumerian, “interest” was mas, which translates to "calf". In Greece and Egypt, the words used for interest, tokos and ms respectively, meant “to give birth”. In these cultures, interest indicated a valuable increase and seemed to consider it from the lender's point of view. The Code of Hammurabi (1792-1750 BC) included laws governing banking operations. The Babylonians were accustomed to charging interest at the rate of 20 percent per annum.
Jews were not allowed to take interest from other Jews, but they were allowed to take interest from Gentiles, who had at that time no law forbidding them from practicing usury. As Gentiles took interest from Jews, the Torah considered it equitable that Jews should take interest from Gentiles. In Hebrew, interest is neshek.
By 1200 BC, cowrie shells were used as a form of money in China. By 640 BC, the Lydians had started to use coin money. Lydia was the first place where permanent retail shops opened. (Herodotus mentions the use of crude coins in Lydia in an earlier date, around 687 BC.)
The use of coins as a means of representing money began in the years between 600 and 570 BCE. Cities under the Greek empire, such as Aegina (595 BCE), Athens (575 BCE), and Corinth (570 BCE), started to mint their own coins. In the Roman Republic, interest was outlawed altogether by the Lex Genucia reforms. Under Julius Caesar, a ceiling on interest rates of 12% was set, and later under Justinian, it was lowered even further to between 4% and 8%.
