scholarly journals The Law of One Price and Arbitrage on China’s Dual-Listings in Hong Kong and New York

2012 ◽  
Author(s):  
Liu Liu ◽  
Timofei Bogomolov
Keyword(s):  
New York ◽  
Hong Kong ◽  
Transaction Costs ◽  
Strict Sense ◽  
Financial Assets ◽  
Time Value Of Money ◽  
Time Value ◽  
Monthly Return ◽  
Arbitrage Trading ◽  
Value Of Money

Traditionally, arbitrage refers to simultaneously buying and selling the same financial assets by taking advantage of a price difference in two or more markets. However, the strict sense of arbitrage is hardly obtained after consideration the issues concerning transaction costs and time value of money. By using the identical assets such as Chinese ADRs and their underlying securities traded in different markets in Hong Kong in HK dollar and in New York in US dollar and by constructing a very simple arbitrage trading strategy, this study demonstrates that arbitrage profits are still available with monthly return ranging from 0.5 per cent to 3.8 per cent after considering transaction costs and non-overlap trading time issues. This is a new study to verify this behaviour of an emerging market’s ADRs traded two financial market locations, so adding evidence of inefficiency in trading of China-listed stocks in foreign locations.  

The Time Value of Money Concept in Islamic Finance

2006 ◽  
Vol 23 (1) ◽  
pp. 66-89
Author(s):  
Abu Umar Faruq Ahmad ◽  
M. Kabir Hassan
Keyword(s):  
Basic Element ◽  
Islamic Finance ◽  
Purchasing Power ◽  
Conventional Theory ◽  
Modus Operandi ◽  
Time Value Of Money ◽  
Time Value ◽  
Value Of Money ◽  
Future Date ◽  
Rule Out

The time value of money is a basic investment concept and a basic element in the conventional theory of finance. The Shari`ah does not rule out this consideration, for it does not prohibit any increment in a loan given to cover the price of a commodity in any sale contract to be paid at a future date. What is prohibited, however, is making money’s time value an element of any lending relationship that considers it to have a predetermined value. Here, the Shari`ah requires that a loan be due in the same currency in which it was given. The value (i.e., purchasing power) of paper currencies varies due to changes in many variables over which the two parties of a loan contract usually have no control. This study examines possible modus operandi of time valuation according to the Shari`ah’s precepts vis-à-vis the concept of money, and whether any value can be attributed to time while considering money’s value. For this purpose, it investigates the juristic views on such relevant issues as the permissibility of difference between a commodity’s cash and credit prices and an increase and reduction of the loan’s amount in return for early repayment.

How Time Value of Money Topics are Taught in Intermediate Accounting Classes

2005 ◽  
Author(s):  
Sheldon R. Smith ◽  
Steve D. Johnson ◽  
Rick T. Henage
Keyword(s):  
Time Value Of Money ◽  
Time Value ◽  
Value Of Money
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