INTRODUCTION The zero interest rate policy [ZIRP] is a monetary tool used by central banks to jump-start the engine of a slowing economy. By reducing the interest rate near to zero, central bank promotes greater leveraging to invest and boost asset prices. It is important to note that there are 2 types of interest rates;…
Merger arbitrage is an investment strategy often used by hedge funds or proprietary trading divisions of investment banks. This strategy is one of the lower volatility investment options and aims at capturing the spread between the offer price and the post-announcement price in a merger or an acquisition. This spread exists because of several risk…
One of the most debatable topics when it comes to investing strategies is short selling. When in principle there is nothing wrong with short selling, policymakers and financial regulators remain sceptic and suspicious with regards this market practice given abusive market practices and the potential risks involved. Often perceived as highly risky strategies, short sell…
Hedge funds are probably the most attractive investment in the financial industry, since a myth has been created around their unbelievable returns and performances. The first hedge fund was set-up in 1949 by Alfred Winslow Jones and its name derived by the word hedging which means managing risk. Although now the definition is inappropriate. At…
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