Importance of Institutional Investors for Financial Markets Essay - 2

Importance of Institutional Investors for Financial Markets - Essay Example By 2005, institutional investors contributed 65% of the equity of firms listed in New York Stock Exchange. The importance of institutional investors in the financial market is that they enhance reduced information asymmetry, promote quality corporate governance, improve liquidity, and increase share prices and value in the financial markets (Sias et al, 2006). Institutional investors act as intermediaries in the financial market (Chen et al, 2007). They intermediate between lenders and borrowers, just like banks. They have a significant function in financial markets because they provide economies of scale by increasing returns on investment and reducing costs of capital for business firms (Chen et al, 2007). They pool savings from lenders and give the money to companies who act as borrowers, enhancing smooth operations between borrowers and lenders in the financial markets. They also encourage diversification by pooling savings from many investors (Demirgà ¼Ãƒ §-Kunt and Levine, 1996). They also play a crucial role in reducing agency costs by monitoring corporate behavior and selecting the profiles of investors. Institutional investors play a big role in the financial markets as highly specialized investors who invest on behalf of others (Chen et al, 2007). A retail investor with a few earnings may not have enough money to purchase a sub stantial amount of securities. Institutional investors may pool funds from many of such individuals and purchase securities on their behalf (Chen et al, 2007). For example, an employee may have a pension plan with his employer. The employer then uses that person’s pension as an investment in a fund, which then buys shares or any other financial product from a company trading in the financial market. These funds hold a broad portfolio of investments in several companies.

Popular Culture (2-3) Research Paper Example | Topics and Well Written Essays - 750 words

Popular Culture (2-3) - Research Paper Example Myths continue to be told today and they are still part of the so called Modern world. The most important Myth that is currently on the minds is the 21st December 2012 Myth. No doubt that this topic is of huge interest to everybody and hence a huge amount of money is being generated by exploiting this interest. December 21st 2012 has been declared as a Doomsday in the Mayan calendar (â€Å"December† n.d. Para 1). Today we undoubtedly see wars, natural calamities, and destruction. Some say that these are the dark times and that these days were prophesied long ago in the Bible, the temples of Rome and the Pyramids of the ancient Maya. The newest version of the Doomsday prophecy comes from the Web.Bot project (â€Å"The web† n.d. Para 8 ). According to the Web.Bot the series of catastrophes reach their peak in the year 2010. What causes us to think more on this Myth or the Prophecy is the surprising similarities in the predictions. The Mayan Calendar: The Mayan calendar ceases to exist after December 21, 2012 (â€Å"2012† n.d. Para 5). The Mayans believed that history consisted of five ages and that each ends in a disaster before the world is reborn. And as per their calendar, we are living in the fifth and the final age which is due to end in December 2012. (D 2012: n.d.) Planet X or the Planet Nibiru: It is claimed that a certain planet Nibiru supposedly discovered by the Sumerians, is headed for the earth and that this will collide with the Earth in December 2012 (D 2012: n.d.). Planets align in a way that impacts Earth: According to the planetary alignment 2012, earth will be at the centre and sun will be present at the top (D 2012: n.d.). It is expected that the rising sun will come in a straight line with the black hole which is situated in the centre of the Milky Way (D 2012: n.d.). The rising sun will touch its lower orbit which can cause many changes in the position of the