Friendly Finances & Loans

Analyses that deal with the integration of high-yielding instruments in bond portfolios must take into account the market inefficiencies mentioned above. Otherwise, false conclusions cannot be ruled out. Because of the biased correlations between individual bonds, historical estimates of the volatility of high-yield indices are too low. Generally, this causes suboptimal portfolio weights that are [...]

Our study displays the composition of the optimized portfolios. As a comparison the market capitalization weights should be kept in mind. Roughly speaking, the market weights of government bonds, agencies and mortgage-backed securities with respect to the US bond market are 26, 12, and 32 percent. Investment grade and high-yield corporate bonds are responsible for [...]

Use budgets for dynamic financial management. Budget early so financial requirements are known as soon as possible. Consider the best time-period for the budget. This is normally a year, but it depends on the type of business. Budgets can be of interest to people outside the business as well as providing a starting point for [...]