Diversifying the risk through portfolio investment
The stock exchange markets are characterized by high dynamics of the investment activity, mainly portfolio investments. The existing relation between yield and risk, on one side, and the portfolio diversification, on the other side, are two basic aspects allowing the investors to build up a portfolio founded on the yield and risk targets which they are aiming. In the frame of this article we have applied the Marcowitz model on a number of portfolios of equities issued by commercial companies listed at the Bucharest Stock Exchange on the main REGS market.
General Aspects of Risk and Uncertainty in Making Financial – Economic Decisions
The risk reflects the chance of an unfavorable event with negative consequences for the decision maker. It is influenced by events or phenomena that affect the affairs of commercial companies, the expression of the failure to achieve the intended gain or the loss in economic transactions. When making the financial-economic decision, the decision-maker must take into account the risk of occurrence of events that may have adverse effects on its objectives. In general, the risk is avoided or if it is not possible to try to minimize it or transfer it. This article presents the concept of risk and uncertainty in making financial and economic decisions in the company’s activity, the distinction between the two and the consequences that may arise.
Trade, exchange rate, and agricultural pricing policies in Thailand
Thailand is still largely an agricultural country. In 1984, agricultural work was still the main source of earnings for more than 70 percent of the population. For much of the 25 year period covered by this report, government intervention in the prices of rice, maize, and natural rubber was extensive. For these products, intervention took the form of explicit export taxes and restrictive quotas. Sugar, on the other hand, was imported until 1960. For many years prior to that, government policy was to encourage growers and thus achieve self-sufficiency. One conclusion of this study is that the Thai sugar industry would have shrunk dramatically if the government had refrained from intervention. Intervention in the prices of rice and natural rubber had the effect of penalizing farm producers by reducing their output prices. There was, as a consequence a shift of resources towards Thailand's small industrial sector. In 1981, the Thai government lifted its quota restrictions, and liberalized its trade by eliminating its intervention in the maize, rice, sugar and natural rubber markets. Unfortunately for export growers, however, the gradual elimination of intervention was overshadowed by sharp declines in the world prices of Thailand's major agricultural exports.