The problem with Kingdom is reconciling this share performance with the underlying assets or the fundamentals.
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In purchasing the stock, you will be paying for the net FMV of the underlying assets.
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If the crisis were simply about the creditworthiness of underlying assets, that question would be simpler to answer.
His company, however, refrains from investing in Russian stock market and deals primarily with companies that have underlying assets.
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Understanding the underlying assets is, or should be, at the core of securitisation.
The donor puts shares of a family limited partnership into the CLAT and values those shares at less--say, 35% less--than the underlying assets in the partnership.
In the scheme related to HP, the plan focused on trading derivatives (basically an agreement or option to buy or sell based on an underlying assets).
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The owners value shares at less than the proportional value of underlying assets on the theory that fractional interests in a portfolio are not worth as much to outsiders.
The most senior cuts issue notes that receive interest from the underlying assets before the more junior ones, whose notes have higher yields because they are riskier.
Banks typically pool funds raised by wealth-management products and invest the money in poorly disclosed assets or projects, leading to a lack of clarity about the underlying assets.
At Cornerstone, investors are receiving "distribution yields" of roughly 22% of net asset value, and the shares trade for much more than the value of their underlying assets.
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This diminishes the overall underlying assets per share, which, in turn, can leave investors with a representative share value of less than one-tenth of an ounce of gold over time.
While banks offer ETFs to their clients, they are also responsible for managing the trading flows that occur when underlying portfolios are hedged and rebalanced (so that prices match the underlying assets).
"There are few other opportunities for that level of yield in a quarterly dividend where the underlying assets are secured, and the duration is three months, " says Neuberger Berman fund manager, Joseph Lynch.
Redemption battles between hedge funds and their investors have been a common feature of the credit crisis as hedge funds blocked cash outflows in the name of preserving value of the underlying assets.
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They do not address the problem of multiple claims on the same underlying assets, for instance: that would probably require banks holding junior liens to take a more realistic view of their value and write them down.
You can transfer stock in a startup before it appreciates, or stick real estate in a family limited partnership and then give partnership shares at a discount from the value of the underlying assets (FORBES, Apr. 17 ).
Money fund shares price at a dollar on a daily basis not because they have promised to repay shares at a dollar, but because the underlying assets are required to meet very stringent portfolio requirements under current SEC regulations.
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Despite limitations on debt that looked low at first glance compared to other investment vehicles, the extreme volatility in the underlying assets owned by the BDCs led to a death spiral involving forced liquidations, asset retrenchment, and dividend cuts.
This could arguably be described as an oversight by many investors who did not understand the nature of their investment or the fact that they had basically no claim on the underlying assets of the company in which they were investing.
Taxpayers have been socking all sorts of assets -- including cash, stock and real estate -- into limited partnerships, and then claiming their stakes are worth 25%, 50% or even 90% less than the underlying assets for gift and estate tax purposes.
The higher yield in the underlying assets of funds like EBND are of no help, because EBND is down 1.5% so far in September while the zero yield of the iShares 3-7y US Treasury Bond (IEI) fund is up 0.35% thanks to higher bond prices.
But there is no guarantee that ETFs will trade at the value of their underlying net assets (NAV).
In some sectors, like emerging markets, it is easier for investors to buy and sell an ETF than to trade in the underlying illiquid assets.
Joe is trading at a discount of 20% to the underlying value of its assets.
The devaluation of the major currencies is also a bullish underlying factor for hard assets in the investment world, including gold and silver.
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Watson explains that what was once a niche sector is now seeing barriers to entry fall, but markets have yet to realize that the underlying value of pipeline assets is substantially higher than the market value of those companies.
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The market place has recently received a shot of confidence the easy money policies of the major central banks of the world will remain in place for quite some time to come, and that is a bullish underlying factor for hard assets like gold and silver.
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After the introduction, the second part explores the implications of digital death by conceptualizing digital assets and surveying the underlying legal principles of contractual policies, probate, property, and privacy concerns.
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The EU debt crisis will remain an underlying bullish factor for safe-haven assets like gold for a long time to come.
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