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COVER
STORY
Will
the "Carry Trade" Carry On?
-- Swaha Shome
When the Bank of Japan raised its overnight rates
in February this year, the impact was felt across all
financial markets. The catalysts to these reactions
were the Chinese stock market, the US prognosis of a
slowdown and the political tensions in Iran. However,
a large part of the financial instability was blamed
on the carry trade unwinding in Japan. This article
attempts to explain the story of carry trade in Japan
and its role in financial integration across the world.
© 2007 IUP . All Rights Reserved
TREASURY
Asia's
Economic Growth : Trends and Patterns
-- Sudha Menon
The article looks at Asia's economic growth, its
trends and patterns record over the past few years,
the influence of government intervention and its sectoral
impact. The article begins by looking at the long-running
debate over the nature of growth. The spectacular growth
of economies in Asia over the past few years has amazed
the economists and has spurred a torrent of books and
articles attempting to explain the phenomenon. Since
1960, Asia, the largest and most populous of the continents,
has become richer faster than any other region of the
world.
© 2007 IUP . All Rights Reserved
RISK
Corporate
Bankruptcy
-- Sunaina Mishra
This article provides a gist of the activities during
and aftermath of the corporate bankruptcy and gives
a picture of the gamble played by several parties involved
in the building of a firm. It also explains the rules
and models applicable based on the corporate structure.
Abankruptcy is the inability of a company to pay its
debts when they become due. When company's liabilities
or debts exceed its assets, it files for a protection
under the federal bankruptcy law. During bankruptcy,
the company stops all operations and goes out of business.
A trustee is appointed by the court to sell off all
the company's assets and the money is used to pay off
debts.
© 2007 IUP . All Rights Reserved
RISK
The
Emergence of Credit Risk Transfer Market
-- Kalyan J Sandilya
Kalyan J Sandilya The article insights a valuable
contribution to the resilience of the entire financial
system. Much of the concentration is on the small number
of market players, regulators and participants who need
to have better risk management systems. It also discusses
the role and functioning of the risk management systems.
The Credit Risk Transfer (CRT) market brings out the
reallocation of credit risks exposure across many financial
and non-financial sectors of the economy.
© 2007 IUP . All Rights Reserved
RISK
An
Overview of the Covered Call and Put Strategies
-- Archana Mehta
The
article discusses the simplest strategy - the covered
call where a single option is involved. This type of
strategy is also known as `buy-write' strategy or covered
write. Here, the investor holds a long position in an
asset and writes call options on that same asset in
an attempt to generate increased income from the asset.
The characteristics and possible outcomes of this strategy
are brought out in this article taking a stock option
as example. The article also throws light on the covered
put strategy.
© 2007 IUP . All Rights Reserved
FOREX
Rupee
Appreciation in Forex Markets
-- Krishna Prasanna P
The
rupee has appreciated by 10% in the last few months
to a great extent due to the intrinsic competitiveness
of the Indian Industry. This article examines the various
reasons and economic consequences of the rupee appreciation
in the Forex markets. India is actively moving towards
financial globalization and the Indian rupee is becoming
an International currency. The rupee has appreciated
by 10% in the last few months. In the month of April
2007 the appreciation is 3.6 %. (See Graphs 1 and 2).
The growing rupee is looked at with surprise and novelty
all over the world.
© 2007 IUP . All Rights Reserved
SPEECH
Inflation
Dynamics
-- Frederic S Mishkin
© 2007 The US Federal Reserve System. Speech by Frederic
S Mishkin, Member of the Board of Governors of the US
Federal Reserve System, at the Annual Macro Conference,
Federal Reserve Bank of San Francisco, San Francisco,
California on March 23, 2007.
INTERVIEW
Indian
Monetary Policy : Implications
-- S S Nagaraj ,The interview was conducted by Anita
C Raman
The
Indian money market distributes a wide range of instruments
having maturity say less than one year, issued by the
government, banks and corporates of different credit
rating and traded in markets of varying liquidity. The
interviewee expresses his views on the present scenario
of the Indian money markets to Treasury Management.
© 2007 IUP . All Rights Reserved
DEBATE
Special
Economic Zones : Issues on Focus
-- Ramakrishna Nallathiga,Bhaskar Goswami
India's
torrid economic expansion over the past five years delighted
investors internationally, but the inevitable shakeout
of rapid growth is starting to rub some nerves raw at
home. Compared to China, India joined the Special Economic
Zones (SEZs) game quite recently. The country first
implemented SEZs in 2000, but the zones only exploded
in popularity after the SEZ Act, 2005 expanded the program
of benefits they offered. Applications for new SEZs
spiked, and as of January 2007, the Indian Government
had approved plans for 237 projects. Two experts air
their views on the various aspects of SEZs in this debate.
© 2007 IUP . All Rights Reserved
BOOK
REVIEW
Understanding
Arbitrage : An Intuitive Approach to Financial Analysis
-- Author of the book: Randall S Billingsley Reviewed
by Nupur Hetamsaria, Aditya M Jadhav
Understanding
Arbitrage: An Intuitive Approach to Financial Analysis
is a commendable effort of Randall S Billingsley to
provide insight into arbitrage, arbitrage process, arbitrage
situations and arbitrageurs or simply `arbs'. The book
defines pure arbitrage as a riskless pursuit of profits
resulting from mispricing of assets. Arbitrage is self-financing
and does not require any investment from the investor.
© 2007 IUP . All Rights Reserved
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