The investment through bonus certificates
The investment through bonus certificates

Author(s): Peter Mokrička
Subject(s): Business Economy / Management, Accounting - Business Administration
Published by: Masarykova univerzita nakladatelství
Keywords: bonus certificate; risk; return; investment;
Summary/Abstract: If a potential investor makes a decision regarding the choice of an asset, he has still an option to invest in this asset direct or indirect. One of the options of an indirect investment is a bonus certificate. The aim of this paper is to examine the change in the investment characteristics, especially a change in the expected return and the risk of investment, provided that the investor will use the bonus certificate instead of a direct investment in the underlying asset. First will be selected an underlying asset. Then it will be modeled the development of the value of this asset by using Monte Carlo simulation. Next it will be discussed possible ways of construction of bonus certificates. Components from which is bonus certificate comprised will be priced and it will be modeled development of the value of bonus certificates on chosen underlying. Then it will be statistically evaluated and assessed the change in investment characteristics compared with investment characteristics of direct investment in the underlying asset. Finally, discussions will be carried out and formulated recommendations.

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