Understanding Financial Instruments: Indexes, Equity & More
Understanding Key Financial Concepts
An index is a group of securities chosen to track a particular investment theme such as a market, asset class, sector, industry, or even strategy. Generally, the goal is to accurately represent the risk/return profile of that theme without necessarily holding every security that might qualify. Indexes can be used in a variety of ways:
- To assess a given market’s performance
- To gauge how well an active strategy is working
- To serve as the foundation for investment
Business Structures: SA, SL, Cooperatives, and Individual Businesses
Understanding Different Business Structures
Sociedad Anónima (SA) – Corporation
- The minimum number of members to constitute an SA is one (sole shareholder).
- The minimum capital for setting up an SA is approximately €60,101.21. This capital is divided into equal parts called shares, which give shareholders rights such as voting at general meetings, receiving periodic information on the company’s situation and accounts, and receiving dividends.
- Shares can be traded on the stock exchange.
- The responsibility
Global Political Economy: Key Periods and Development Models
Rise and Fall of Liberalism
- International trade
- The gold standard
- Technological and industrial advances
- Emergence of USA after British hegemony
Setbacks to Liberalism
- The effect of WWI and WWII
- The Big Crash (1929): 1st crisis
Growth and Expansion
- Keynesianism and expansion of EU, USA, and Japan
- Bretton Woods international monetary system: Fixed exchange rates with dollar-gold standard
- Trade expansion (GATT)
Crisis and Neo-Liberalism
- Oil crisis (2nd)
- External Debt crisis
- Neo-liberalism: solution to ‘Stagflation’
China’s Business Environment and Market Entry
1. Business Competitive Environment
Ease of Doing Business: China’s rank in global “Ease of Doing Business” indexes has improved over the years, particularly in areas like starting a business, dealing with construction permits, and enforcing contracts. However, challenges remain in areas like obtaining credit and protecting minority investors.
General Freedom: While China offers significant business opportunities, the regulatory environment can be complex and subject to political control. The government
Understanding Unemployment and Labor Market Dynamics
Types of Unemployment
Unemployment can be categorized into several types:
- Frictional Unemployment: This occurs when individuals are temporarily unemployed while transitioning between jobs, searching for their first job after graduation, or voluntarily choosing not to work to pursue further training or childcare. This is not typically considered a social problem.
- Seasonal Unemployment: This type of unemployment arises due to fluctuations in demand for labor at specific times of the year.
- Cyclical Unemployment:
Key Concepts in Microeconomics
Microeconomics Concepts and Principles
Production Functions with Perfect Substitute Inputs
For perfect substitute inputs, the production function is: X = Y1 + Y2
Constant Returns to Scale
With constant returns to scale, proportional increases in all factors lead to a proportional increase in output.
Zero Fixed Costs
If fixed costs are zero, average variable costs and average total costs will be equal.
Demand Curve with Positive Price Elasticity
A demand curve with a positive direct price elasticity (not
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