1.1 Introduction
Known as ‘Au’ in chemistry, which derived from Latin word ‘Aurum’, gold is one of the commonly used metals in the world. Gold is one of the most popular metals to be used as an investment. Gold has caught the attention of many investors from all over the world that valued gold as a hedge against economic crisis.
Physically, gold is a glamorous yellow metal that usually worn by woman as jewelry. In terms of chemical, gold can resist corrosion and in fact, can be easily oxidized. Besides of its use as jewelry, it is extensively used in medical especially in dentistry. There are a lot of chemical and industrial applications of gold. Despite that, gold has limited applications which have set gold to be more or less useless.
Despite of its uselessness, gold is known to be expensive. The reasons are quite simple: because gold is rarely found, gold cannot be created and most importantly is it is shiny and does not oxidize. Gold hence is widely used as jewelry and other representative uses. In addition to that, the overgrowing demand for jewelry and the rareness of gold hence determined its price. In return, gold is assumed as the ideal store of wealth for its high price.
The gold price depends on: the general state of the U.S. and world economies, the state of the world financial system, including central bank policies, industrial demand, government spending, currency markets, mine production, jewelry demand, and investment demand.
There are many reasons why investing in gold is such a sound and profitable choice, and one of the main reason is gold is because there is no maintenance on it. Although gold will inflate at certain time, the trend is usually going upwards. Gold is a universal commodity that is va...
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...goodness of fit test.
1.5 Scope of Study
The model used in this study is Geometric Brownian motion model. Historical and discrete method is used to estimate the parameters of the GBM model.
The sample of data used is taken from http://www.investing.com/indices/ftse-malaysia-emas-historical-data, which observed from September 2010 to May 2011 with a total of 148 data.
1.6 Significance of Study
By carrying this study, it provides a more realistic representation of the observed data. Individual or relevant bodies such as researchers, mathematicians, invertors, consumers, and companies will benefits from the study. To mathematicians especially, they might further modify and improve modeling of gold share price in the future.
Gold is one of valuable economy indicator. The rising of gold share price is bringing benefits to investors.
Gold is one of the most valuable materials all around the world. This jewel has its own glittering appearance and shiny color which induce people to desire to possess it. That’s probably why Europeans in the middle age have explored new continents and invaded other civilizations to find this glittering material. Americans also had given much endeavor to mine that valuable jewel in the time of gold rush. Investigating these events, gold has immensely affected the world history; the Age of Exploration, invasions of Spaniards, and the development of California.
Alloys in the ornament manufacturing are a general use of gold. Because of it is...
The first gold findings were found at a mill business in stream beds in 1848. Gold mines were immediately put into action underground and above. Easy gold extraction reeled in the inexperienced and experts knowing they could find large quantities of the valuable mineral making them richer faster. Also the actions of cutting class lines with the skilled upper class men and the unskilled lower class laborers working at the same gold fields next to one another(Gold Rush 1849). The extremely wealthy anxious to get more rich than they already were. The poor and middle class to find gold and wealth for a better
Gold is a particularly volatile commodity that has not been traditionally hedged against price risk, but over the years many firms in the industry have adopted risk management strategies with great enthusiasm. Particularly zealous is the American Barrick Resources Corporation. The company embraced risk management and even incorporated it into one of its main business objectives. Over the years American Barrick has grown into a successful and fast-growing firm, however after discovering abundant ore deposits in a recently purchased mine the company is particularly exposed to price risk. The price of gold and interest rates are at historically low levels and American Barrick is unsure of how to proceed.
The gold standard was a commitment from participating countries to set their currencies in terms of specified amounts of gold. The country’s government allows its currency to be converted into a set amount of gold and vice verse. The main benefit of a gold standard is to help keep inflation low since it is caused by changes in the supply and demand of money and goods. The government cannot print too much money because the supply of money would increase, but the value of gold would remain the same and eventually would result in the treasury running out of gold. This is tricky because the government could not increase the amount of money in circulation without also increasing the country’s gold reserves. The extensive use of the gold standard implies a system of fixed exchange rates where gold is really the only
...s the example of the price of the gold to determine the relationships between the Linear Algebra and the Financial World. The uses of the financial concepts and the mathematics equations generally support the author’s aim of the price changing in different period of time. As the mathematics research article, it has clearly uses the symbols and equations to support the point of view of the author which shows the result of the element of the completed market and the changes of the price. However, it is not easy for a people who lack of mathematics knowledge to understand the concepts and equations of the mathematics. It will be easier for them to read and understand the author’s explanation if there are more explain on the equations or more wording explanations. Overall, Barbara Swart had been clearly explained the relationship of Linear Algebra and Financial World.
2 (1970): 383–417. i.e. a. Fama, Eugene F. “Efficient Capital Markets II.” Journal of Finance 46, no. 1 (September, 2011). 5 (1991): 1575–1617.
In theory, market capitalisation weighted indices are preferred as compared to equally weighted indices due to the fact that they are superior proxies and are consistent with the true market portfolio. Some practitioners argue that there is a perceived segmentation between the Resources, Financial and Industrial sectors on the JSE and consequently prefer to use the Financial and Industrial Index as an overall market proxy for stocks belonging to this category. Choosing the correct market index in order to regress against, is a vital aspect. Stambaugh (1982) identifies that the CAPM tests are generally insensitive to the choice of market proxy. However, many believe that the broader the selected indices, the better the market proxies. In the UK market, the two main indices used are the FT 100 which is made up of the top 100 companies and the FT All Share Index which is made up of all companies traded on the exchange.
In turn everything in the present and the future is judged through the stocks as they hold a high importance in industrialized economies showing the healthiness of said countries economy. As investing discourages consumer spending over all decreases, it lead...
The execution of our investment strategy occurred in three stages. First, we invested in t-bills and bonds according to our original set out investment plan. This was to decrease potential losses and risk associated with the declining equity market. Therefore, we invested about two hundred thousand of our funds into these low risk assets to maintain buying power. Due to inflation, we did not want to lose buying power by leaving funds in an account without earning interest. Further, we invested a small portion of funds into the commodity market. With a slumping equity market and a positive outlook on the gold commodity, we invested in Gold Corporation at the same time we invested in income assets.
The use of a gold pan is one of the oldest and most simple forms of gold mining.( Colledge) The biggest thing to remember about the gold pan is that even though it may be relatively effective in catching gold, its main drawback is that it can only process so much material at one time. This is why the gold pan is not used as a commercial mining tool in the name of processing large amounts of material for pay. A gold pan may be used to get places that can only be reached on foot. But the material must have to be rich enough to make the time worth it if there is only a limited amount of material to be processed. The main use for a gold pan other than recreational purposes is to locate a area with gold bearing ground so that later on commercial mining equipment may be brought in to retrieve gold from a large area of ground
First, in order to function properly, countries have to follow rules to avoid deflation or inflation. However, if a country wanted to, they could easily deflate or inflate their economy by breaking said rules. The second major flaw of the gold standard is that there is not enough gold in the world to serve as money anymore because there is too much money in circulation. The process of mining gold is dangerous, expensive and difficult as it is hard to find. The process of printing dollar bills is quick, easy and cheap. Why go through the effort to mine more gold when the fiat system has arguably done just as well? The choice is clear, the gold standard has been replaced by a new, better standard – the fiat
Following the trend of economy, it is important to investors to understand that strong economy creates strong stock market. To elaborate further, as stock prices are increased by current and future expectations of earnings, thus without a strong economy it would be difficult for the companies to increase and sustain their earnings (Kong 2013). The economy development is usually calculated using the gross domestic product of a countries. On the other hand, a change is the stock price can also cause a major impact to the consumers and investors directly. Hence, a loss in confidence by investors can cause a downturn in consumer spending in the long term, which will also affect the economy’s output (Aysen 2011). The graph below shows the relationship of stock market price (KLCI) and the GDP of Malaysia in 2009. Thus, it can be concluded that the economy and the stock market has a positive relationship.
Gold is the “noblest'; of the noble metals (gold, platinum, palladium, and rhodium), so termed because of their inertness, or reluctance to enter into chemical reactions. Gold will not react with common acids but is attacked by a three-to-one mixture of hydrochloric and nitric acids. This combination is called aqua regia because it reacts with the so-called royal metal. Gold will not combine directly with oxygen, but oxides may be formed indirectly. Gold will also combine with the halogens (fluorine, chlorine bromine, and iodine) and with the cyanides.
When buying gold, there are things that need to be taken into consideration. The purpose of buying gold will determine the kind of gold that is bought. One gold expert advised buying contemporary gold bullion coins if the purpose is prize movement capitalization or hedging financial uncertainties. Pre-1933 gold coins are good...