Portfolio Choice and Transactions Taxes

Arbeitspapier

In a simple portfolio choice model of two assets a foreign exchange transactions tax is implemented. We show that the graph in the mu-sigma[square] range is still a parabola and delineate its characteristics for altering tax rates. We presumed a risk avers investor seeking to minimize investment risks by international diversification of two uncorrelated assets. The main finding is that setting up a portfolio under the new tax condition leads to a higher transaction volume on international financial markets. In contrast, the transactions tax has got a stabilizing character when adjusting the portfolio to increased foreign investment risks.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CoFE Discussion Paper ; No. 03/09

Classification and Topics

• Classification: Wirtschaft ; Fiscal and Monetary Policy in Development ; Taxation and Subsidies: Other ; Fiscal Policies and Behavior of Economic Agents: Other ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance ; Portfolio Choice; Investment Decisions ; International Financial Markets ; General Financial Markets: Government Policy and Regulation
• Subject: International Financial Markets ; Portfolio Choice ; Risk Diversification ; Tobin Tax ; Transactions Tax ; Portfolio-Management ; international ; Tobinsteuer ; Internationaler Finanzmarkt ; Börsenumsatzsteuer ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Haberer, Markus
• Event: Veröffentlichung
• (who): University of Konstanz, Center of Finance and Econometrics (CoFE)
• (where): Konstanz
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/23560
• URN: urn:nbn:de:bsz:352-opus-11167
• Last update: 10.03.2025, 11:42 AM CET