Reference no: EM133046072
How to overcome these barriers:
Some of the risks Jaguar would encounter while venturing into the Indian Market are as below: -
Foreign Exchange Rate Risk
Foreign stock and bond investments often yield returns in the local currency. As a result, investors will have to exchange this local money for their home currency. Therefore, currency fluctuations can impact the total return of the investment.
Jaguar could counter this by laying a strong financial base by critically analyzing the forex market using well-qualified expertise.
Non-Normal Distributions
Financial models can be used to price derivatives and generate reasonably accurate economic predictions regarding the future of stock prices.
On the other hand, emerging market assets cannot be valued using the same type of mean-variance analysis. Furthermore, because emerging markets are constantly changing, it is nearly hard to use past data to draw accurate correlations between events and returns.
By venturing into regions with a stable market would be the best solution to non-formal distribution.
Lax Insider Trading Restrictions
Insider trading and other types of market manipulation create market inefficiencies, causing equity prices to diverge dramatically from their inherent value. Such a system can be prone to wild speculation, and people with privileged information can exert a lot of power over it.
Ensure that there is no market manipulation and establish a common market plan with its competitors.
Please answer how to overcome these barriers.