A global economic and financial boom in the 20th and 21st century

A global economic and financial boom in the 20th and 21st century Essay example
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Finance & Accounting
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There was a global economic and financial boom in the 20th and 21st century.This resulted in tremendous growth of opportunities for businessmen, investors, governments, financial intermediaries and other financial institutions to invest their money…

Introduction

There was a global economic and financial boom in the 20th and 21st century.This resulted in tremendous growth of opportunities for businessmen, investors, governments, financial intermediaries and other financial institutions to invest their money. In other words, they needed to create a portfolio of assets that lead to high returns with assets that do not yield very high returns, but are safe. The major objective behind this investment strategy was to maximize the wealth and at the same time make sure that the investment would not lead to credit risk or risk of default. Before making any investment, investors are required to price the assets clearly. This requires knowledge of financial statement analysis and security analysis. Those investors who lack the financial guile and knowledge suffered in the long-run. Investment analysis is a detailed field of study. It combines theory of financial evaluation with the practical implications. The task is tough, but it is by no means impossible. Analysts combine various financial techniques such as NPV, security valuations, IRR and other tools of investment appraisal to evaluate the investment opportunities they have. The investment decision is usually based on the return on investment and safety of investment. However, there is a negative correlation between the two. High yielding assets are usually not very safe. Safe assets usually do not have very high yields. ...
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