discuss the history and failure of each of these three firms‚ what they had in common and what was unique to them‚ and finally the impact of their failures. Long Term Capital Management History In 1994‚ a very large pooled investment vehicle‚or hedge‚fund was created in Greenwich‚ Connecticut‚ USA1 calledLong Term Capital Management L.P‚ abbreviated by its acronym LTCM. LTCMwas
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Behavioral Finance Jay R. Ritter Cordell Professor of Finance University of Florida P.O. Box 117168 Gainesville FL 32611-7168 http://bear.cba.ufl.edu/ritter jay.ritter@cba.ufl.edu (352) 846-2837 Published‚ with minor modifications‚ in the Pacific-Basin Finance Journal Vol. 11‚ No. 4‚ (September 2003) pp. 429-437. Abstract This article provides a brief introduction to behavioral finance. Behavioral finance encompasses research that drops the traditional assumptions of expected utility
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Risk arbitrage (or merge arbitrage) is a trading strategy related to M&A transactions. For example‚ if an M&A transaction is carried out by means of share exchange between the buzzer and the target‚ then an arbitrageur may short sell buyer’s stocks and purchase stocks of the target. Until the acquisition is completed‚ the stock of the target typically trades below the purchase price. After the merger is completed‚ the target’s stock will be converted into stock of the acquirer based on the
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reductions‚ and addressing the systemic challenges contributing to crime. DeBlasio is also supporting common sense gun safety led the effort to divest public pension fund holdings in companies that manufacture the most dangerous weapons and launched the “Wall Street for Change” campaign to support gun divestment of prominent hedge funds and money managers
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We live today in a multi-polar world where immense financial and economic activity has resulted in wealth being amassed and destroyed on an unprecedented scale in different parts of the world. This dynamic has been driven by the effects of globalization and the structural shift between developed and emerging markets. The recent crisis in financial markets and the global geo-political situation has brought with it challenges which will require increased depth and understanding for the changing dynamics
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Risk Arbitrage: Abbott Labs and Alza Harvard Business Review Case Study 1. BACKGROUND Risk Arbitrage is essentially just arbitrage with some element of risk. Three main types of risk arbitrage are merger and acquisition arbitrage (also known as just merger arbitrage)‚ liquidation arbitrage‚ and pairs trading. We will focus on merger arbitrage‚ as it pertains to this case study. Merger arbitrage is an investment strategy that chooses to capitalize upon arbitrage that presents when a merger
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Understanding market efficiency. 3 Prof. Doron Avramov‚ The Jerusalem School of Business Administration‚ The Hebrew University of Jerusalem‚ Investment Management Syllabus: Contents Analyzing performance of mutual funds; Comparing properties of mutual funds and hedge funds; Examining evidence on profitable trading strategies in global and domestic markets‚ especially‚ the size‚ value‚ price momentum‚ earnings momentum‚ and volatility effects in stock prices; Forming optimal portfolios
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Beta Management Summary of facts: Beta Management is new‚ small mutual fund that is run by Ms. Wolfe. She has recently begun to work full time at her mutual fund due to its increasing growth. With the fund’s increasing growth over the past year Ms. Wolfe has started to have inquiries from larger mutual funds wanting her to manage some of their money. Ms. Wolfe does not have much experience in managing money and needs some advice on how to deal with the larger institutions. Problem: Beta Management
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To be successful in any business or industry‚ it requires a combination of knowledge and understanding of whom the customer base is and how to do it better than the competition. Hostess had been in tune with its customers for over eighty-two years while curbing appetites and serving up an array of sweet treats as rich as the company history until late 2012‚ when the company announced it would seek bankruptcy protection. This decision would directly affect eighteen thousand jobs and would leave millions
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Yale’s $8 billion man David Swensen has made better returns for Yale than any portfolio manager at any university. He has a word of advice: don’t try this at home. by Marc Gunther ’73 July/August 2005 Marc Gunther is author of Faith and Fortune: The Quiet Revolution to Reform American Business and senior writer at Fortune magazine. Last spring‚ Yale president Richard C. Levin ’74PhD held a cocktail reception for David F. Swensen ’80PhD‚ who was celebrating his 20th year as Yale’s chief investment
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