Lognormally distributed share returns and Multilateral Investment Guarantee Agency: Difference between pages

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If share returns are lognormally distributed it means that the logarithm of [1 + the share return] has a normal probability distribution.
''Development - World Bank.''


(MIGA).


Normal distributions have infinitely long ‘tails’ both upside and downside - so implying unlimited downside potential when used for modelling share returns.  
The Multilateral Investment Guarantee Agency is one of the institutions of the World Bank Group.


But the theoretically worst outcome for a share investor is to lose the whole of their investment - in other words a negative return of -100%.  
MIGA provides political risk insurance and credit enhancement support for cross-border investors and lenders in the private sector.




It is not theoretically possible to suffer a return of worse than -100%.
== See also ==
* [[Agency]]
* [[Credit enhancement]]
* [[Insurance]]
* [[International Bank for Reconstruction and Development ]]  (IBRD)
* [[International Development Association]]  (IDA)
* [[International Monetary Fund]]
* [[Political risk]]
* [[Private sector]]
* [[Trade and Development Bank]]
* [[World Bank]]
* [[World Economic Forum]]


Lognormal distributions - unlike normal distributions - also have a limited downside, so they do not suffer from this theoretical shortcoming.


 
==External link==
== See also ==
*[https://www.miga.org/ MIGA - what we do]
* [[Lognormal frequency distribution]]
* [[Normal frequency distribution]]
* [[Volatility]]


[[Category:The_business_context]]
[[Category:The_business_context]]
[[Category:Financial_products_and_markets]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Trade_finance]]

Revision as of 09:18, 2 December 2021

Development - World Bank.

(MIGA).

The Multilateral Investment Guarantee Agency is one of the institutions of the World Bank Group.

MIGA provides political risk insurance and credit enhancement support for cross-border investors and lenders in the private sector.


See also


External link

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