Survey On Market Risk In Nigeria

Project and Seminar Material for Actuarial Science

Survey On Market Risk In Nigeria


Chapter One


Introduction

1.1 Background of the study

Market risk is the risk that the value of an investment will decrease due to moves in market factors. It can also be said to be the risk to an institution resulting from movements in market prices, in particular, changes in interest rates, foreign exchange rates, and equity and commodity prices. Market risk is often propagated by other forms of financial risk such as credit and market-liquidity risks.Market risk is the risk of loss in the value of a financial institution’s proprietary trading holdings in equity, debt, FX or commodity instruments, due to fluctuations in market prices.

Market risk can also arise with the management of client’s moneys where financial institutions provide unhedged guaranteed minimum returns. A form of market risk also arises where banks accept financial instruments exposed to market price volatility as collateral for loans. Poor market risk management practices can lead to significant losses very quickly in volatile market conditions and also complete institutional collapse in severe situations. The most spectacular recent case of market risk management failure was the bankruptcy of Bear Sterns, a US investment bank with substantial proprietary trading activities, at the start of the global financial crisis in 2008. During the 1998 emerging market crisis, LTCM a large US hedge fund made massive losses on so called zero risk arbitrage derivative contracts and the US Fed had to step in to prevent a systemic disruption. However, the most famous case was probably the collapse of Barings Bank, a 100 year old British bank (and bankers to the royal family) in 1995 due to inadequate oversight of equity futures proprietary trading activities in the Asian operations.

The global financial crisis has shown that financial markets are becoming more integrated, more complex and more volatile, than what was previously commonly believed. The importance of market risk management will thus increase going forward.The management of market risk is highly complex. To limit the size of market risk exposures it should allow traders to take to achieve profit targets, a bank needs to have an understanding of the size of potential loss that can be incurred under extreme market volatility. As nobody has a crystal ball, we can only rely on statistics to provide us with an estimate of downside market volatility. Deriving variance/co-variance parameters from historical market rates data, we can estimate for a given statistical confidence limit what the maximum potential lossin a downside scenario could be.


1.2 Statement of the general problem

The loss of finances as a result of the instability of the market has resulted to the steady decline of our economic base and foreign reserve. This has equally discouraged small and medium enterprises which is one of the cardinal thrust of any economy. The lack of proper understanding of the market has influenced unnecessary inflation and scarcity of goods.


1.3 Objectives of the study

The following aims and objectives of the study

  1. To survey the Nigerian market risk.
  2. To analyze the risk factor involved in venturing into the Nigerian market.
  3. To know the stability level of Nigerian markets.
  4. To know if the Nigerian market is safe for investors.
  5. To know if the Nigerian market encourages SME development.

1.4 Significance of the study

This study will be of importance to investors as this would help them in knowing the true state of the Nigerian market. This study would also be of immense importance to SME owners in understanding the level of risk factor involved in Nigerian market.


1.5 Scope and limitation of the study

This study is restricted to the survey on market risks in Nigeria.

Limitation of the study
Financial constraint

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint

The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.


1.6 Research Questions

What is the stability level of Nigerian markets?

  1. Is the Nigerian market is safe for investors?
  2. Does the Nigerian market encourage SME development?
  3. Is the risk in venturing into the Nigerian market enormous?

1.7 Research Hypothesis

H0; The risk factor of venturing into the Nigerian market is not enormous

H1; The risk factor of venturing into the Nigerian market is enormous


1.8 Definition of terms

1. Market Risk:

The possibility for an investor to experience losses due to factors that affect the overall performance of the financial markets. Market risk, also called “systematic risk,” cannot be eliminated through diversification, though it can be hedged against. The risk that a major natural disaster will cause a decline in the market as a whole is an example of market risk. Other sources of market risk include recessions, political turmoil, changes in interest rates and terrorist attacks.

2. SME:

Small and medium-sized enterprises (SMEs) are non-subsidiary, independent firms which employ less than a given number of employees. This number varies across countries.

3. Volatile:

Volatility frequently refers to the standard deviation of the change in value of a financial instrument with a specific time horizon.

4. Investment:

The action or process of investing money for profit.


Survey On Market Risk In Nigeria


Project Material Download

3,000 Naira


The complete material will be sent to you in just 2 steps.

Quick & Simple…


Step One Purchase

Make payment of ₦3,000: through USSD Transfer, Bank Mobile App, ATM Transfer, or POS Transfer to:

Access Bank PlcAccount No.: 0811003731
Name: Samphina Academy
Account Type: Current

Or Click Here to pay with Debit Card

FOR CLIENTS OUTSIDE NIGERIA:
Click Here to pay with Debit Card ($15)
GHANA – Make Payment of 60 GHS to MTN MoMo, 0553978005, Douglas Osabutey 

  PAY WITH CRYPTOCURRENCY


Step Two Purchase

Send the following details through Text Message or WhatsApp Messenger | +234-8143831497

  • Payment Details 
  • Email Address 
  • Survey On Market Risk In Nigeria

The complete material will be sent to your email address after receiving your payment information | T & C Apply


  Contact Our Help Desk


You may also like:

⚠️ Need a different topic? Perform a quick search



Get A Complete Business Plan For Any Business In Nigeria

Business Plan for Businesses in Nigeria

  Business Plans in Nigeria


Survey On Market Risk In Nigeria


Disclaimer

This research material “Survey On Market Risk In Nigeria” is for research purposes and should be used as a guide in developing your research project / seminar work. For no reason should you copy word for word (verbatim) as samphina.com.ng will not be liable for any who copied the material.

The aim of providing this material is to reduce the stress of moving from one school library to another all in the name of searching for research materials. This service is legal because, all institutions permit their students to read previous projects, books, articles or papers while developing their own works. According to Austin Kleon “All creative work builds on what came before”.

samphina.com.ng is only providing this material “Survey On Market Risk In Nigeria” as a reference for your research. The paper should be used as a guide or framework for your own paper. The contents of this paper should be able to help you in generating new ideas and thoughts for your own research. Use it as a guidance purpose only.


How to defend your research work


This is a general guide on how to defend your research work:

1. Prepare For Questions:

If you are preparing for questions that may be asked during your defense, then your answers will flow smoothly and effectively. This will prove your knowledge on the subject e.g “Survey On Market Risk In Nigeria“, and strengthening your argument. Ask friends and family, read your work for them to listen to your presentation, and write down questions. You may be lucky the panel will ask you those you have already prepared on.

2. Strong Summary:

Summarizing your chapters will help keep your audience focused because it is easy for a mind to drift, so providing summaries will ensure your panel will follow along, even if they lose focus for a brief moment. Visual aides, such as graphs and power-point presentations can be very helpful. If you are going to use these, make sure you will practice your presentation with them.

3. Be Confident in Your Research Work:

Not knowing your topic “Survey On Market Risk In Nigeria” inside out will cause you to struggle and ultimately fail with your defense. You need to know the subject from every angle to ensure you are fully prepared for any question that may come your way.

4. Conclusion:

Reinforce your findings to conclude your defense. The finale of your presentation should focus on proving the work that has been done. You may need to recap on what has changed and remained unchanged, if is necessary.

5 . Listen:

Before you get defensive or recite a particular answer, make sure you truly understand the question being asked. Being a good listener is an important quality, because providing an inaccurate or off-topic answer will also weaken the validity of your paper.

Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.