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 [...]

All of the examined asset classes exhibit significant positive autocorrelation. There are two main reasons that should be noted. As mentioned earlier, one reason is the illiquidity of certain segments of the international bond markets. The high-yield sector is a typical example for a rather illiquid market segment. Broad high-yield indices represent the investment universe [...]

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 [...]

Ensure that customer decisions improve profitability. Stepping back from routine decisions and considering how to derive greater value from existing customers and products may enhance profitability. Questions to consider include: How can customer loyalty (and repeat purchasing) be enhanced? How can the sales proposition be made more competitive? (Simply improving it may not be enough; [...]

Some of the most useful practical techniques to improve profitability are as follows: Focus decision-making on the most profitable areas. Concentrating on products and services with the best margin will protect or enhance profitability. This may involve redirecting sales and advertising activities. Decide how to deal with the least profitable products. These often drift, with [...]