"Scientific research" Almanac

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  REAL OPTIONS – THE NEW PARADIGM IN INVESTMENT DECISION MAKING

  Financial theory has long tried to impose discounted cash flows techniques as a revolutionary approach in evaluating investment alternatives, offering a more accurate and complete idea of the potential in creating a value replacing the „Payback period” that has long been used in capital budgeting. Discounting of cash flows had been the main and ... Financial theory has long tried to impose discounted cash flows techniques as a revolutionary approach in evaluating investment alternatives, offering a more accurate and complete idea of the potential in creating a value replacing the „Payback period” that has long been used in capital budgeting. Discounting of cash flows had been the main and indisputable paradigm in making investment decisions prior to the emergence of a real options analysis (ROA) - an application of the theory of financial options in capital budgeting. Real options enhance valuation by embedding flexibility in capital budgeting procedures – the ability of firms to react adequately to favorable or adverse changes in the economic environment, competition or markets. Real options analysis is the perfect approach in evaluating long-term investments and it will not be long before it replaces completely the traditional tools in capital budgeting.

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  INFLUENCE OF FINANCIAL DERIVATIVES ON THE CAPITAL MARKET OF MAJOR EUROPEAN EXCHANGES

  There are still opinions in professional circles about the danger of financial derivatives and their blame for the current crisis. At the same time there are isolated studies regarding the specific effects of derivatives and they have a narrow focus – a separate tool, limited market and time. The current study looks for arguments about the actual ... There are still opinions in professional circles about the danger of financial derivatives and their blame for the current crisis. At the same time there are isolated studies regarding the specific effects of derivatives and they have a narrow focus – a separate tool, limited market and time. The current study looks for arguments about the actual influence of financial derivatives on the capital market in terms of studying the biggest West European exchanges with options and futures based on their instruments. An analysis is made of the most fundamental market indicators: exchange turnovers – in a premium value and number of contracts, open positions, movement of indexes, volatility, etc. The results of the correlative, comparative and traditional investment analyses lead to the fundamental findings: derivative trading improves market liquidity of the basic capital instruments and aids their risky management, the activity of derivative exchanges is more stable in years of crisis than that of the stock exchanges, which indicates a better risk-return correlation; an analogous analysis of the Russian markets for the same period corroborates some findings and shows some interesting differences in investment behaviour. In terms of methodology the parallel analysis between main indicators such as: exchange volumes, option rate and open positions enable the indication of fundamental changes in investment behaviour and of occurring financial and economic cataclysms.

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  MACROECONOMIC STATE OF BULGARIA AND PROSPECTS FOR DEVELOPMENT OF BULGARIAN ECONOMY

  Bulgaria has managed to reduce the deficit as required according to the excessive deficit procedure and is carrying out a substantial reform aimed at raising the statutory retirement age for both men and women. Despite the progress made by the Government in fulfilling its reform programme, the main challenges facing the country’s policy have ... Bulgaria has managed to reduce the deficit as required according to the excessive deficit procedure and is carrying out a substantial reform aimed at raising the statutory retirement age for both men and women. Despite the progress made by the Government in fulfilling its reform programme, the main challenges facing the country’s policy have remained largely unchanged. Due to the constant increase in unemployment there should be more active reorientation of the active employment policy in order to improve employability. The low educational achievement shows that the provision of quality education faces significant structural barriers. Sustainability and adequacy of the pension system are still not fully guaranteed. The quality of public expenditure, the tax system efficiency and the business environment are suboptimal. Bulgaria is largely dependent on imported energy and its energy market is not fully operational.