Credit derivatives, some of the most significant developments is the financial industry, have experienced significant growth recently. The objective of this study is to examine whether the use of credit derivatives, either buying or selling, has an effect on banks loan pricing behaviour. Minton et al. (2009) propose that the net buyers of credit protection save capital and thus should be able to make loans at rates that are below the rates offered by competitors who do not utilize credit derivatives. In addition, Hirtle (2009) investigates the relationship between credit derivatives and their effects on bank lending activities. She does not find a strong association between the use of credit derivative and the supply of loans and proposes that banks are using credit derivatives mainly to provide longer maturity and lower spread loans rather than to increase the volume of loans. In contrast to previous studies, our study investigates the relation between loan prices, measured by the interest and fee income per dollar of loans, and the use of credit derivatives at BHCs. We propose that if BHCs use credit derivatives to hedge credit exposures, they would charge a lower loan rate to the borrowers since CDs enable banks to transfer the credit risk away from the lenders. However, if credit derivatives are used for purposes other than managing credit exposure, these instruments might not have any impact on loan pricing. Another goal of our study is to investigate the relationship between loan prices and the use of credit derivatives for trading purpose. We expect that during the years when BHCs are net sellers of credit derivatives, they take these positions because they have good quality loans and they are willing to take additional risk. In this case, they would report lower income per dollar of loans. However, if banks sell CDs as part of their speculative strategy, their use of credit derivatives might not have any impact on loan prices. Thus, banks would charge a rate that is similar to other banks with the same level of risk. Another goal of our study is to find, for both users and non-users of credit derivatives, how the interest and fee income generated by the BHCs is affected by the risk of default of their clients. We expect that as the risk of default increases, the prices on loans would increase as well. Banks take additional risk in exchange for higher return. Our final goal of this study is to investigate whether the use of CDs affects the supply of funds or loan rates differently for different types of loans banks hold in their portfolios. Our findings suggest that the loan prices of users of CDs are significantly less than the loan prices of nonusers. This finding may suggest that users are more efficient, competitive and diversified than nonusers and thus can afford to charge a lower rate to their clients. The result may also suggest that BHCs that are using CDs generally have lower risk loan portfolios and these portfolios are generating lower income per dollar of assets. Among the users group, we observe that as the volume of CDs purchased increases the prices of loans also increase. This suggests additional usage of CDs allows users to accept risky loans that they would not accept in the absence of CDs. They are initiating these high-risk loans to generate higher interest and fee income and at the same time they are using more CDs to hedge these risky loans. Our study also finds a significant and positive relationship between the risk of default and BHCs loan prices. Our study further investigates the users of credit derivatives during the years when these banks use CDs and the years when they do not use CDs. We find that the loan prices are marginally lower for the years when CDs are used. In particular, we find a significant decrease in prices during the years when these banks are sellers of CDs. However, we do not find any significant impact on loan prices during the years when they buy CDs. This result suggests that CD-active BHCs that buy CD protection are doing so to reduce some excessive risk they have taken without demanding a high rate to compensate for this risk. Finally, we find that the years when BHCs report both CDs bought and CDs sold, they charge a loan price that is similar to the years when these banks do not report any position in the CDs market. Perhaps the BHCs that report simultaneously CDs bought and CDs sold are selling CDs to generate income and hedging their positions through buying offsetting positions. Our analysis also suggests that the impact of the use of derivatives varies depending on whether the loans are real estate, consumer, commercial and industrial, agricultural, or foreign loans.

Bank holding companies (BHCs) in the United States (US) have been recently required to report foreign exchange derivatives in two accounts. One account includes the foreign exchange derivatives held for trading while the other account contains the foreign exchange derivatives held for purposes other than trading. The objective of this study is to examine the factors that determine the sizes of these two accounts.<p> We propose that the size of the securities portfolio held for purposes other than trading is an indicator of the magnitude of the hedging operations by a US BHC. In particular, we are interested in the portfolio of foreign exchange derivatives held for purposes other than trading and we refer to this portfolio as the foreign exchange derivatives hedging account. Our proposition is consistent with Adkins, Carter and Simpson (2007) who regard the securities that are held for purposes other than trading as primarily used for hedging purposes. Thus, we use the foreign exchange hedging account to study the foreign exchange hedging behavior of BHCs and determine the factors that influence the magnitudes of the foreign exchange hedging accounts.<p> Hedging activities in general are very important for practitioners, regulators, and academics as evidenced by the extensive publicity and attention that has been given to interest rate risk and the extensive research that has been done to examine the factors that determine the magnitudes of interest rate hedging activities. Yet, little research has been devoted to examine the factors that determine the magnitudes of the foreign exchange hedging activities in US BHCs. One purpose of this study is to fill this gap in the literature.<p> Similarly, we propose that the size of the trading account of a BHC is an indicator of the magnitude of the trading operations. These operations are attracting the attention of academics, regulators, and practitioners as they can generate significant revenues to BHCs but they are sources of significant risks. For example, much of the surprisingly high revenues reported by major US banks in the first and second quarters of 2009 are credited to trading operations while revenues from other activities were significantly low. On the other hand, trading activities are largely blamed for several catastrophic financial events such as the collapse of the Baring Bank PLC and the financial crisis of 2008 which nearly leads to the collapse of the global financial system. One objective of this study is to improve our understanding of the foreign exchange derivatives trading and the factors that influence the magnitudes of the foreign exchange trading accounts at US BHCs. Given the importance of the trading operations it is surprising that little research has been done in this area.<p> The results of this study are derived from empirical data observed over the period from 1995 to 2007 inclusive. This data is obtained from the financial reports and statements of US BHCs. We use regression analysis to show that the notional amounts of the foreign exchange derivatives held in the hedging and trading accounts are related to various firm-specific and environmental factors. In particular, we argue that the net asset exposure, which measures the difference between the assets and liabilities denominated in foreign currency, and the net income exposure, which measures the difference between the interest income and interest expenses denominated in foreign currency, should be significant determinants of the notional amount of derivatives held in the hedging account. We propose that these two factors are indicators of a BHCs exposure to foreign exchange fluctuations and hedging should be designed to offset their influence on the value of assets or level of income. In addition, we propose that a BHCs size and level of capitalization affect the size of the hedging account.<p> Similarly, we propose that the notional amount of foreign exchange derivatives held for trading should be related to the same factors. In particular, we argue that the notional amount of derivatives in the trading account is related to the net asset exposure and the net income exposure as they indicate a BHCs involvement in international operations such as lending, deposit taking, risk management, and correspondent relationships in foreign countries. In our opinion, the larger the involvement in international operations the larger is a BHCs ability to trade foreign exchange derivatives.<p> This study makes several unique contributions. First, it shows that the net asset exposure and the net income exposure have positive and significant effects on both the hedging and the trading accounts. Second, we show that the capital ratio and the magnitude of the hedging and trading accounts are positively and significantly related. In addition, this study confirms that the magnitude of total assets is a positive and significant determinant of BHCs foreign exchange derivative securities held in either the hedging or the trading accounts. This result is consistent with previous studies such as Carter and Sinkey (1998), Brewer, Jackson and Moser (2001), Adkins, Carter and Simpson (2007), and Hassan and Khasawneh (2009).

Bank holding companies (BHCs) in the United States (US) have been recently required to report foreign exchange derivatives in two accounts. One account includes the foreign exchange derivatives held for trading while the other account contains the foreign exchange derivatives held for purposes other than trading. The objective of this study is to examine the factors that determine the sizes of these two accounts.<p> We propose that the size of the securities portfolio held for purposes other than trading is an indicator of the magnitude of the hedging operations by a US BHC. In particular, we are interested in the portfolio of foreign exchange derivatives held for purposes other than trading and we refer to this portfolio as the foreign exchange derivatives hedging account. Our proposition is consistent with Adkins, Carter and Simpson (2007) who regard the securities that are held for purposes other than trading as primarily used for hedging purposes. Thus, we use the foreign exchange hedging account to study the foreign exchange hedging behavior of BHCs and determine the factors that influence the magnitudes of the foreign exchange hedging accounts.<p> Hedging activities in general are very important for practitioners, regulators, and academics as evidenced by the extensive publicity and attention that has been given to interest rate risk and the extensive research that has been done to examine the factors that determine the magnitudes of interest rate hedging activities. Yet, little research has been devoted to examine the factors that determine the magnitudes of the foreign exchange hedging activities in US BHCs. One purpose of this study is to fill this gap in the literature.<p> Similarly, we propose that the size of the trading account of a BHC is an indicator of the magnitude of the trading operations. These operations are attracting the attention of academics, regulators, and practitioners as they can generate significant revenues to BHCs but they are sources of significant risks. For example, much of the surprisingly high revenues reported by major US banks in the first and second quarters of 2009 are credited to trading operations while revenues from other activities were significantly low. On the other hand, trading activities are largely blamed for several catastrophic financial events such as the collapse of the Baring Bank PLC and the financial crisis of 2008 which nearly leads to the collapse of the global financial system. One objective of this study is to improve our understanding of the foreign exchange derivatives trading and the factors that influence the magnitudes of the foreign exchange trading accounts at US BHCs. Given the importance of the trading operations it is surprising that little research has been done in this area.<p> The results of this study are derived from empirical data observed over the period from 1995 to 2007 inclusive. This data is obtained from the financial reports and statements of US BHCs. We use regression analysis to show that the notional amounts of the foreign exchange derivatives held in the hedging and trading accounts are related to various firm-specific and environmental factors. In particular, we argue that the net asset exposure, which measures the difference between the assets and liabilities denominated in foreign currency, and the net income exposure, which measures the difference between the interest income and interest expenses denominated in foreign currency, should be significant determinants of the notional amount of derivatives held in the hedging account. We propose that these two factors are indicators of a BHCs exposure to foreign exchange fluctuations and hedging should be designed to offset their influence on the value of assets or level of income. In addition, we propose that a BHCs size and level of capitalization affect the size of the hedging account.<p> Similarly, we propose that the notional amount of foreign exchange derivatives held for trading should be related to the same factors. In particular, we argue that the notional amount of derivatives in the trading account is related to the net asset exposure and the net income exposure as they indicate a BHCs involvement in international operations such as lending, deposit taking, risk management, and correspondent relationships in foreign countries. In our opinion, the larger the involvement in international operations the larger is a BHCs ability to trade foreign exchange derivatives.<p> This study makes several unique contributions. First, it shows that the net asset exposure and the net income exposure have positive and significant effects on both the hedging and the trading accounts. Second, we show that the capital ratio and the magnitude of the hedging and trading accounts are positively and significantly related. In addition, this study confirms that the magnitude of total assets is a positive and significant determinant of BHCs foreign exchange derivative securities held in either the hedging or the trading accounts. This result is consistent with previous studies such as Carter and Sinkey (1998), Brewer, Jackson and Moser (2001), Adkins, Carter and Simpson (2007), and Hassan and Khasawneh (2009).

Credit derivatives, some of the most significant developments is the financial industry, have experienced significant growth recently. The objective of this study is to examine whether the use of credit derivatives, either buying or selling, has an effect on banks loan pricing behaviour. Minton et al. (2009) propose that the net buyers of credit protection save capital and thus should be able to make loans at rates that are below the rates offered by competitors who do not utilize credit derivatives. In addition, Hirtle (2009) investigates the relationship between credit derivatives and their effects on bank lending activities. She does not find a strong association between the use of credit derivative and the supply of loans and proposes that banks are using credit derivatives mainly to provide longer maturity and lower spread loans rather than to increase the volume of loans. In contrast to previous studies, our study investigates the relation between loan prices, measured by the interest and fee income per dollar of loans, and the use of credit derivatives at BHCs. We propose that if BHCs use credit derivatives to hedge credit exposures, they would charge a lower loan rate to the borrowers since CDs enable banks to transfer the credit risk away from the lenders. However, if credit derivatives are used for purposes other than managing credit exposure, these instruments might not have any impact on loan pricing. Another goal of our study is to investigate the relationship between loan prices and the use of credit derivatives for trading purpose. We expect that during the years when BHCs are net sellers of credit derivatives, they take these positions because they have good quality loans and they are willing to take additional risk. In this case, they would report lower income per dollar of loans. However, if banks sell CDs as part of their speculative strategy, their use of credit derivatives might not have any impact on loan prices. Thus, banks would charge a rate that is similar to other banks with the same level of risk. Another goal of our study is to find, for both users and non-users of credit derivatives, how the interest and fee income generated by the BHCs is affected by the risk of default of their clients. We expect that as the risk of default increases, the prices on loans would increase as well. Banks take additional risk in exchange for higher return. Our final goal of this study is to investigate whether the use of CDs affects the supply of funds or loan rates differently for different types of loans banks hold in their portfolios. Our findings suggest that the loan prices of users of CDs are significantly less than the loan prices of nonusers. This finding may suggest that users are more efficient, competitive and diversified than nonusers and thus can afford to charge a lower rate to their clients. The result may also suggest that BHCs that are using CDs generally have lower risk loan portfolios and these portfolios are generating lower income per dollar of assets. Among the users group, we observe that as the volume of CDs purchased increases the prices of loans also increase. This suggests additional usage of CDs allows users to accept risky loans that they would not accept in the absence of CDs. They are initiating these high-risk loans to generate higher interest and fee income and at the same time they are using more CDs to hedge these risky loans. Our study also finds a significant and positive relationship between the risk of default and BHCs loan prices. Our study further investigates the users of credit derivatives during the years when these banks use CDs and the years when they do not use CDs. We find that the loan prices are marginally lower for the years when CDs are used. In particular, we find a significant decrease in prices during the years when these banks are sellers of CDs. However, we do not find any significant impact on loan prices during the years when they buy CDs. This result suggests that CD-active BHCs that buy CD protection are doing so to reduce some excessive risk they have taken without demanding a high rate to compensate for this risk. Finally, we find that the years when BHCs report both CDs bought and CDs sold, they charge a loan price that is similar to the years when these banks do not report any position in the CDs market. Perhaps the BHCs that report simultaneously CDs bought and CDs sold are selling CDs to generate income and hedging their positions through buying offsetting positions. Our analysis also suggests that the impact of the use of derivatives varies depending on whether the loans are real estate, consumer, commercial and industrial, agricultural, or foreign loans.

Aim: The purpose of the thesis is to give small private investors an insight the financial world of derivatives and to show that an investor does not need to consult with an advisor in order to make decisions about the investments. The aim was to show through a new product that a small investor can beat the market return. Method: The method used in the thesis is to collect data over a three year period for an option, a bull ETF and a treasury bill. The database DataStream was used to obtain statistics of the option and the Treasury bill and Nasdaq OMX Nordic was used for the Bull ETF. We calculated the expected return and variance of each in order to use in the portfolio. Having the information needed we then used a trial-and-error method to calculate the weight each component will be given, with the help of Excel and its Solver add-on. Result &amp; Conclusion: The results were surprising in that over the three year period the product had a 100% increase, while the market only went up by 30%. The major reason for the products strong return was that the daily earnings were shifted everyday so that the weights remained constant throughout the life of the product. The issue with the product was that no transaction costs were included in the calculations, and as there would be at least one transaction per day the costs would be enormous for the given product. Suggestions for Further Research: As one of the limitations for the thesis was that no transactions cost were included, one idea for further research could be to calculate the transaction costs as well as seeing if there is a method to minimize them so that the product could be profitable. Contribution to the Field: To our knowledge we are the first to test theses three components in order to from a structured product. Through our method interested parties could do the same with other components or retest our product. We have showed through our method one way to create your own structured product.

No description available.

The detection of Ceo and Cro in 1985 and the subsequent development of a preparative procedure have opened up a new area of research in carbon chemistry. The study of physico-chemical properties of these molecules is currently being pursued with great interest. The goal of the present thesis is to provide simple generalization concerning the structure and bonding which would be of useful interpretive value in understanding the reactivity patterns. The stability of a large number of derivatives have been examined at uniform levels of semiempirical MO theories. The results are shown to be consistent with simple localized bonding model of molecular and electronic structure of Ceo and Cro. Additional factors influencing the relative stabilities of fullerene derivatives are also analysed.

Includes bibliographical references (p. 36-38).

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Nanostructures, molecular assemblies at the nanometer scale, are currently influencing diagnostics, imaging, and therapeutics. Many nanostructures are built using supramolecular chemistry principles, where hydrogen bonding between simple building blocks causes the formation of specific morphologies. Here we hypothesize that a six stranded DNA nanotube can be generated by tethering triaminopyrimidine and cyanuric acid building blocks as bases on the natural DNA backbone. We also hypothesize that cyanuric acid, a secondary oxidation product of guanine, will form complex architectures with adenine, its natural hydrogen bond complement. To test these hypotheses, we used multi-step synthetic strategies to generate DNA strands of cyanuric acid and triaminopyrimidine. The synthesis of the cyanuric acid DNA strand is complete and preliminary self-assembly studies with adenine DNA strands have been performed. The synthesis of the triaminopyrimidine DNA strand is ongoing. This thesis provides the groundwork for incorporating supramolecular building blocks into DNA to generate complex DNA architectures.