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S. Danylina
Virtuality of Fictitious Capital in Modern Conditions
Summary:
The article discusses "financialization" – the process of transformation of financial capital into fictitious and virtual capital and its separation from the real manufacturing sector. It shows a tremendous growth in the financial sector in the last decades of the 20th century and the beginning of the new century and growing segmentation of financial instruments due to financial innovations, aimed, among other things, at evading government regulations, which increase their influence on the trends in the real and financial sector, leading to the creation of conditions for the emergence of financial crises and financial "bubbles". We study the market of derivative securities, its dynamics and impact on the economy of Ukraine.
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Lyubomir Dimitrov
A PORTFOLIO METHOD FOR INTERNATIONAL REAL ESTATE INVESTMENTS
Summary:
The article analyzes the possibility of improving the risk/return characteristics of an international real estate investment portfolio via the acquisition of residential offshore properties. It takes the perspective of the American investor. First, the index DOKHPI is constructed to measure annual changes in property prices in the Cayman Islands and appreciation returns. After the addition of the rental income yields, the estimated total annual returns are included in a mixed portfolio composed of American and Caymanian residential real estate assets. The benefit of investing in offshore real estate is demonstrated by the construction of efficient frontier and correlation matrix.
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Nigohos Kanaryan
ENHANCING THE ADJUSTMENTS OF MARKET MULTIPLES FOR BETTER OPERATING EFFICIENCY
Summary:
The study focuses on one of the specific applications of the market approach. The market approach is a valuation method whereby the fair market value of the target company is determined by reviewing comparable companies with similar operational and financial characteristics. The International Valuation Standards (2017) require that a valuer should make adjustments to the selected market multiples. Kasarova, Pramatarska and Lazarova (2009) and Todorov (2015) propose a method for adjusting market multiples for country risk and efficiency when the market approach is applied to emerging markets. We enhance their adjustment approach by removing its inherent restrictions.
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Stoyan Prodanov, Tsetan Pavlov
Comparative Analysis of the Leading Consumption-Based
Asset Pricing Models
Summary:
The article analyzes in depth the consumption-based asset pricing models, and displays most perspective contemporary trends in the field. A conceptual framework of models has been originally presented linking macroeconomic and financial relationships, and mathematical basis of the classic CCAPM has been developed. The paper also brings out the leading approaches for modification of the basic model, overcoming some of its shortcomings, and analyzes the advantages, disadvantages and the ability of consumption-based modern models to recreate empirical correlations in profitability and the risk of financial assets. The leading conclusion of the article is that there is still no convincing rational consensus model to reproduce adequately the characteristics of financial markets. From an econometric perspective, the closest in this endeavour is the model of long-term risk of Bansal and Yaron (2004) and its modifications.
