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Download Wealth Management: Private Banking, Investment Decisions, by Dimitris N. Chorafas PDF

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By Dimitris N. Chorafas

This booklet has issues: inner most Banking and funding judgements concerning Structural monetary items. Dr. Dimitris Chorafas examines in a rigorous manner even if dependent monetary items are a good suggestion investments for retail and institutional traders and, if convinced, which dangers they entail. As our society turns into more and more prosperous, and state-supported pension schemes locate it tough to outlive, progressively more excessive net-worth contributors, and households, became retail traders - searching for methods and capacity to optimize wealth administration, and personal Banking bargains with those varieties of consumers. inner most banking additionally bargains with consumers which are institutional traders, similar to pension money, mutual cash, and insurance firms, in addition to not-for-profits, foundations and corporations explicitly manage for wealth administration. either institutional and retail traders are being provided by way of the banks they paintings with based items. quite often, those are securities that supply them with a redemption volume, with could be both with complete or partial capital security, and a few form of go back. The e-book examines based monetary items, their polyvalent nature, and the consequences that may be anticipated from them. go back on structural tools, that are primarily derivatives, is paid in functionality of a selected funding approach on chosen underlying asset(s). This basically potential at the functionality of the underlyings, acquired via asset managers, that could be banks or hedge cash, via buy or sale of embedded innovations. yet there are dangers. either chance and go back from dependent items are regarding 3 major concerns: the volatility of destiny worth of an underlying, the uncertainty of destiny occasions, and the publicity of the product. all types of funding is topic to marketplace forces, and the extra leveraged a portfolio is, the larger will likely be either the assumed possibility and the anticipated gift. the truth that dependent monetary items attraction, or no less than are being advertised, to either retail traders and institutional traders makes the twin technique intentionally selected during this e-book so much a good option. This publication addresses these kind of concerns in a pragmatic demeanour with a variety of case experiences and real-world examples drawn from the author's in depth learn. *Because it's according to in depth learn, the e-book is wealthy in useful examples and case stories *Addresses the turning out to be development in the direction of using dependent monetary tools in inner most banking *Thorough remedy of dependent monetary items that retains maths to a minimal

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Additional info for Wealth Management: Private Banking, Investment Decisions, and Structured Financial Products

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The investment advisor’s assistance is precious in establishing a priori a realistic estimate of risk and reward because, in the majority of cases, investors are not forthcoming with crisp criteria that can be used effectively in choosing and managing assets. One of the reasons is that although many private banking clients are professionals in other channels of activity, few have a clear idea of what is involved behind financial risk and return. Therefore, it is the duty of the personal banker to help them in sorting out their priorities, and this must be done at two levels of reference: ᭿ ᭿ The establishment of an effective banking relationship characterized by mutual trust (see Chapter 8), and Steady management of the client’s assets, including a cost-effective execution of transactions involving buying and selling of financial products.

1 explains this concept in a nutshell. Customer-by-customer, the first row addresses business costs, and the second, business income. Steady risk evaluation is crucial because all transactions involve greater or lesser exposure to the bank, particularly when it is inventorying some of the products itself. The risk being assumed should be monetized and subtracted from the theoretical profit and loss estimate, to produce a pragmatic profit estimate for each client. 1 Customer mirror by channel and integration 28 Wealth Management Such integration of goals and means, of costs and risks is very important for good governance reasons.

Overall, the expert system integrates domain knowledge of: ᭿ ᭿ Shares, bonds and other instruments, including their market(s) and price(s), Foreign currency markets, exchange rates and associated country risk. Based on such inputs, including market values, the inference engine of the expert system will provide investment recommendations, capitalizing on the opinion of experts to enrich its domain knowledge. It will also document the opinion that it gives. For instance, given projections on market developments: ‘Be as defensive as possible’, ‘Beware of the long-term bear market that commenced in 2000; it is still in force’, ‘Eliminate overweight positions in emerging-market stocks’, ‘Liquidate highyield “junk” debt’, and so on.

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