Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/23560
Authors: 
Haberer, Markus
Year of Publication: 
2003
Series/Report no.: 
Discussion paper series / Universität Konstanz, Center of Finance and Econometrics (CoFE) 03/09
Abstract: 
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.
Subjects: 
International Financial Markets
Portfolio Choice
Risk Diversification
Tobin Tax
Transactions Tax
JEL: 
O23
H29
H39
O16
G11
G15
G18
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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