Movie Analysis: Movie Review: Margin Call

Question 1:
Summary: Margin Call

The film begins as an established financial firm is busy downsizing. A group of external Human Resources personal is summon the various “victims” to inform them that they are to be retrenched. The Risk Management division head (Dale), amongst various other employees, falls prey to the ruthless process of cutting down on employees. He is offered a six month severance pay as compensation. As he is leaving the building under security supervision, he hands a USB containing his current work to a junior analyst (Sullivan) and warns him to “be careful.”The analyst completes Dale’s project and is able to interpret his findings as the firm being in dangerous proximity of exceeding Historic Volatility levels. He learns
Although no company name is ever mentioned in the movie, it is obvious that the story follows an investment bank. ”A simple explanation of Investment banks, would be that they facilitate the flow of funds and allocation of capital.”(Kuhn, 2011) They form link between those who require capital and those who provide it. Investment banks create financing mechanisms and structures that allow for better risk-return features for investors as well as ‘issuers.’ This is achieved by using techniques such as hedging and diversification.
They act as brokers, dealers and “market makers.” These firms participate in wealth management and thus compete with other Investment Banks as well as with Commercial Banks. Investment banks like the one in the movie perform a variety of services. For example they specialize in complicated financial transactions such as purchasing large quantities of newly issued shares and then reselling them to eager investors. Investment banks participate in underwriting securities such as stocks and bonds. Investment Banks find, price, finance and aid in the facilitation of mergers and acquisitions.Other activities included in Mergers and Acquisitions are:
• The restructuring and recapitalization of
Unfortunately there is no guarantee that you will receive a portion of the profit. Creditors take preference over investors so, if due to unfortunate circumstances the company goes under, investors will be the last to be repaid their investments. 2.)Preference shares
Investors are entitled to certain rights, however, the nature of these shares do not allow for voting rights. Preference shareholders get a portion of the profits before those who are ‘ordinary shareholders.’ Preference shares are considered to be less risky, which is why payouts are lower than for ordinary shares.

Property:
Property investment includes investing in property companies which are listed. Property investment typically refers to commercial property. (ie: Warehouses, offices etc…) An important attribute of this specific asset class is that it can keep up with inflation.
The potential for attractive long term returns exists due to the appreciation of property. Property can provide an income due to the rental that can be earned on a property. Rent income is one of the main reasons why investments in commercial property occurs. The risk involved in property investment can be classified as moderate to