4FI3 INDIVIDUAL REPORT

4FI3 INDIVIDUAL REPORT - Page | 1 Contents EXECUTIVE...

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Contents EXECUTIVE SUMMARY This report contains an in depth analysis on macro-economic activities to analysis its effects on the indices, currencies and gold. The second stage process is to use the information and data received to conduct appropriate trading by using the $1,000,000 given and using Reuters 3000 and Bloomberg as aids to help maximize profits. The investments in the four stocks selected was done to reduce the level of risk involved by using derivatives such as options as hedging tool. The four stocks selected were all in the basic material sector and included; Yamana Gold (YRI.TO), Barrick Gold Corp (ABX.TO), NewMont mining Corp (NEM) and Dow Chemical (DOW). My trading was conducted both in the Canadian and American stock exchange. The report is structured as a top down approach and beginning with an economic overview that describes the financial crises that took place in 2008 and the recovery that has taken place. The report next talks about the relevant indices to the four stocks, these indices include; Dow Jones Industrial average (.DJI), S&P/TSX (.GSPTSE) and S&P 500 (.SPX). The report is then followed by a summary currency and gold movements followed by company description and history (for the 3 months). The report also discuss in depth analysis of each trade conducted to describe the reasoning behind the purchase and sales of the underlying stock, then finally the report ends with a conclusion. Page | 2
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Between the fourth quarter of 2007 and the first quarter of 2009, $50 trillion dollars in global wealth evaporated and some 40 million people have lost their jobs due to the recession. The unparalleled actions of world policymakers pushed to stabilize the financial system that was crippled over a year and a half ago and helped restore the credit market. Share Prices have recovered and in some sectors has significantly improved as global trade volume stabilizes and as commodity price trend upwards. Due to stimulus efforts, consumer and business confidence is also progressively returning to normal worldwide, and there are signs of stabilization in the distressed housing markets. Economic regions in the first quarter have continued to improve although the level of performance is varying widely in each region and countries like China has seen incredible rebound in growth rate. The International Monetary Fund has now projected that the global economy will grow 3.1 percent in 2010 with developed nations only contributing 30% to that growth. In Canada, the economy is projected to take a significant hit due to a decrease in exports to U.S which makes up 73 of the Canadian exports due to strengthening CAD. It is for this reason that domestic demand will be seen as the main source of growth in 2010. It is also projected that the Canadian economy will grow to grow at a modest pace 2.6 percent, year over year in 2010 before increasing up to 3.3 percent in 2011. Page | 3
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This note was uploaded on 03/28/2011 for the course COMM 4FI3 taught by Professor Siam during the Fall '10 term at McMaster University.

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4FI3 INDIVIDUAL REPORT - Page | 1 Contents EXECUTIVE...

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