Here the price of the option is its discounted expected value ; see risk neutrality and Rational pricing: Risk-neutral valuation.

Risk-neutral measures make it easy to express the value of a derivative in a formula.

* Risk-neutral Valuation: A Gentle Introduction, Part II.

But the quest for such an index goes on ceaselessly, with all manner of investors and speculators participating, ranging from the sedate institutional type virtually to the proverbial shoe-string operator, all seeking doggedly, studiously, daily -- and often nightly -- for the enchanting index that will foretell the eternal secret: Which way will the market move -- up or down??

It's going to take time for investors to learn how many of the toll-road bonds will pay out in full.

Prices may diverge during a financial crisis, often termed a " flight to quality "; these are precisely the times when it is hardest for leveraged investors to raise capital ( due to overall capital constraints ), and thus they will lack capital precisely when they need it most.

As a result, most investors will not commit to financing a film unless an insurer can be found to protect them against the risk that the film ultimately cannot be released as a result of a total catastrophe such as total loss of film negatives ( or digital media ), death of the Director or Stars during production, natural disasters destroying the sets, and so on.

Many hedge funds are established in offshore financial centres so that no tax is charged at the fund level ( although the investors will still be subject to tax in their own jurisdictions on any increase in the value of their investments ).

Limited partnerships are principally used for hedge funds aimed at US-based investors who pay tax, as the investors will receive relatively favorable tax treatment in the US.

Hedge funds are typically open-ended, meaning that the fund will periodically accept further investment and allow investors to withdraw their money from the fund.

Once the fund is able to sell the side pocket assets, the fund will generally redeem the side pocket interests / shares and pay investors the proceeds.

Side pockets therefore allow a fund to ensure that all investors in the fund at the time the relevant assets became illiquid will bear any loss on them equally and allow the fund to continue subscriptions and redemptions in the meantime in respect of the main portfolio.

Funds with more than 15 US clients and investors managing US $ 25 million or more will have to register with the SEC by July 21, 2011.

According to modern portfolio theory, rational investors will seek to hold portfolios that are mean / variance efficient ( that is, portfolios offer the highest level of return per unit of risk, and the lowest level of risk per unit of return ).

Many investors follow the summaries of these insider trades in the hope that mimicking these trades will be profitable.

In addition, we are signing today a Double Taxation Convention which will bring benefits to British business in Libya and Libyan investors in the UK – benefits in terms of certainty, clarity and transparency and reducing tax compliance burdens.

The parliament approved the government's economic growth and strategy paper in December 2004, but international financial institutions and Western investors will not be satisfied until the government begins to address fiscal adjustment, wage restraint, and payment of debt arrears.

American companies and people will be allowed to invest in the state-owned Myanma Oil and Gas Enterprise, but any investors will need to notify the State Department within 60 days.

The scheme has met with strong opposition from environmentalists, who protest the damage that would be done to the rivers and jungle. The project will be like the original plans only in the fact that the US government would buy the land for investors to start building the canal.

# The capital asset pricing model ( CAPM ) and related portfolio separation theorems, which imply that, in equilibrium, all investors will hold a mixture of the market portfolio and a riskless asset.

Even though Trabant doesn't have much of a history of being green, two German companies are trying to find investors to create the Trabant nT, an electric car that will be equipped with a 45 kW asynchronous motor powered with a lithium-ion battery.

Employees who are enrolled automatically will become investors in the default fund at the default rate, although they may select different funds and rates if they choose, or even opt out completely.

When the existing business is to assume a major change or when planning a new venture, a 3 to 5 year business plan is required, since investors will look for their annual return in that timeframe.

The bank then acts as an underwriter, and will arrange for a network of broker ( s ) to sell the bonds or shares to investors.

Transactions on the secondary market don't directly help raise finance, but they do make it easier for companies and governments to raise finance on the primary market, as investors know if they want to get their money back in a hurry, they will usually be easily able to re-sell their securities.

Though far from completion, these studies indicated beyond a doubt that savings would result which would be of unprecedented benefit to the railroads concerned, their investors, their customers, their users, and to the public at large.

`` Billions of American dollars, not only from capital investors but also from the pockets of U.S. taxpayers '', this author states, `` are being poured into South Africa to support a system dedicated to the oppression, the persecution, and the almost diabolical exploitation of 12 million people the color of whose skins happens not to be white ''.

Coin hoarders may be similar to investors in the sense that they accumulate coins for potential long-term profit.

Registration is reported to be simple and transparent, and foreign investors are guaranteed access to the official foreign exchange market to repatriate their profits and capital.

The area of study examines issues such as how each major form of business entity may be formed, operated, and dissolved ; the degree to which limited liability protects investors ; the extent to which a business can be held liable for the acts of an agent of the business ; the relative advantages and disadvantages of different types of business organizations, and the structures established by governments to monitor the buying and selling of ownership interests in large corporations.

# The time value of money ( risk-free rate ) – according to the theory of time preference, investors would rather have cash immediately than having to wait and must therefore be compensated by paying for the delay.

# A risk premium – reflects the extra return investors demand because they want to be compensated for the risk that the cash flow might not materialize after all.

When investors and managers perform DCF analysis, the important thing is that the net present value of the decision after discounting all future cash flows at least be positive ( more than zero ).

The owners of both bonds and stock, may be institutional investors-financial institutions such as investment banks and pension funds or private individuals, called private investors or retail investors.

Under the original estimates ( from 2000 ) this cost would have been € 7. 7 billion, of which only € 2. 6 billion was to be borne by taxpayers and the rest by private investors.

Like most of Central America, Honduras in the 1990s began to woo foreign investors, mostly Asian clothing assembly firms, and it held high hopes for revenue to be generated by privatizing national industries.

Because hedge funds are not sold to the public or retail investors, the funds and their managers have historically not been subject to the same restrictions that govern other funds and investment fund managers with regard to how the fund may be structured and how strategies and techniques are employed.

Investors in hedge funds are, in most countries, required to be sophisticated qualified investors who are assumed to be aware of the investment risks, and accept these risks because of the potential returns relative to those risks.

In contrast to the funds themselves, investment managers are primarily located onshore in order to draw on the major pools of financial talent and to be close to investors.

Offshore corporate funds are used for non-US investors, which would otherwise be subject to more complex tax issues by investing in a tax-transparent entity such as a partnership, and US entities that do not pay tax such as state, corporate, private and union pension funds, which would otherwise be subject to unrelated business income tax in the United States.

If the illiquid assets subsequently turned out to be worth less than expected, the remaining investors would bear the full loss while the redeemed investor would have borne none.

For SEC registered hedge fund advisers to charge an incentive or performance fee, the investors in the funds must be " qualified clients " as defined in the Investment Advisers Act of 1940 Rule 205 – 3.

Investors in hedge funds must be accredited investors, with certain exceptions ( employees, etc.