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How Investors Perceive Derivative Trading?

Despite of its benefits, derivative trading has acquired a bad image to investors due to fundamental factors such as negative news, inaccurate opinions, misinformed perceptions and insufficient comprehension. Several people base their opinions only on the negative stories they see on television or read in newspapers. This led many investors to neglect the possible rewards derivatives can offer.

 

The growth of derivative trading is remarkable even with the negative publicities. Investors, who understand it, know how it can assist them in spotting the price changes of the underlying assets. Derivative contracts usually offer significant leverage as well as low cash requirement that enable the speculator to create high profits resulted from minimum actions in the value of the underlying security. Investors use them as security or protection from adverse price alteration. Traditionally, investors use most derivatives to minimize risk of future price change.

 

There are four common opinions investors usually have on derivative trading:

 

  • Several investors find this type of trade complicated. This is true for some derivatives especially that investors may need to review the list of equity options or covered writings. In addition, investors need to familiarize themselves with puts, calls, calendar spreads, strips, straps, strangles, bull spreads, butterfly spreads, bear spreads and straddles.
  • Investors find this type of trade expensive. Although the products have become commoditized, the services have not. This service requires a lot of work and it is just logical for it to require a fee. The damage of losing a huge part of market value due to lack of security on your portfolio can end up becoming more expensive.
  • Investors perceive it as an institutional market. This is true according to the research performed by a consulting company known as Greenwich Associates. It states that in 2005, the national volume of interest rate derivatives was close to $1.5 trillion, 85% of which belongs to the 260 institutions that each traded a value of more than a million dollars. Derivatives, is an international marketplace in which 63% came from the U.K. and Europe, 27% in Canada and the United States, and 10% is in the Pacific Rim and Asia.
  • Investors see it as entirely speculative and hugely leveraged. Hedge vehicles become very risky when utilized as a main investment. Several investors fail to see that derivatives can alleviate risk once used the right way. Some investors make the mistake of ignoring single stock ownership risk, systematic risk, credit risk or event risk. They also fail to comprehend that some derivatives are contract markets.

 

Many experienced traders know that derivative trading is less risky compared to other type of trades. The growth of risks can only rapidly increase once a hedge vehicle is utilized as an investment. However, success in this trade will depend on how suitable an investor is in a certain market.

 

CL King is a full-service investment bank and provides equity research, sales and trading, and investor services to corporations and institutions. The firm offers investment research, equity and fixed income sales and trading, prime brokerage, investment advisory, and clearing services. To align with CL King experts' capabilities call at 518.447.8050

 

Essentials To Make An Investment Portfolio

Investing is not a game. Not for the weak hearted. Stock markets move up and down. One cannot just predict the market. Not possible to predict its movement. Hence cannot time it's up and down. One can build a solid portfolio so as to possibly succeed. Few considerations to keep in mind.

 

Invest with a goal in mind - As discussed in one of the point, the purpose of investing should be kept in mind. Even before starting with the investment. One should know what it will cost to achieve that purpose. Purpose shows the path to investment. Always correcting it when invest is going off the path. Yogi Berra, a wise baseball philosopher sums up "If you don't know where you're going, you'll miss it every time."

 

Your present situation and risk you can take - What is the financial position today? How much one has earned and how much one has saved till date. In future date what will be the need. How much earning should be there so as to save enough amount to fulfill the required goal.

If the savings is insufficient then that saving should be channelized for investment. Then the amount will increase in the shorter period. When investment comes into picture the topic of risk arises.

All investment carries risk. The level may vary from type of investment. One extreme is high-risk takers and another extreme is risk-averse. This depends upon nature of the individual and the circumstances.

With risk comes the reward. High risk, high rewards. Low risk, low rewards. Usually, individuals take the middle path. Medium risk and medium rewards. One can take help of the best share tip provider to ease the situation.

 

Purpose - There should a definite purpose or goal for investment. It should personal one like a holiday abroad or buying a home or marriage or education or retirement or anything. Once the purpose or goal is set, next is setting the time to achieve it. It can be a week or month or a year or a decade.

Example, going for a holiday trip to Europe next summer. Here the purpose is holiday trip. Time duration is 2 years. What you want to do and when. Get nifty future tips, two-day free trial.

 

Quality, not quantity - For the long term, it is the quality which lasts, not quantity. Whatever be the components of your portfolio, see that it maintains quality. Because one's holdings are critically important.

 

Diversified investment - The portfolio should not be put up in a haphazard manner. It should be put up with proper planning. It should be put up after considering the fundamental and technical's of the securities.

The portfolio should be diverse across sectors (IT, banks), caps (small, mid, large) industries (cement, mining, pharma), bonds, fixed deposit, provident funds, precious metals and stones (gold, diamond), MFs, real estate, geographical regions, commodities tips etc.

 

Here risk tolerance of the investor should also be taken into account. Certain investments are risky in short terms but are not risky in long term. There are many share market advisory company who can calculate the risk associated.

 

In shares, one should look for cash flow, product, profits, dividend history, management, place of among peers, etc of the company.

Current market shares may be expensive or cheap, which depends upon present political environment, demand and supply, etc. Buy only quality 'A' listed shares.

 

If you want to learn more, consult with the experts at CL King and Associates. You can call at 518.447.8050
Or visit here: http://www.clking.com/

Why You Need to Add Large Cap Funds to Your Portfolio?

The mutual fund industry has expanded remarkably in the past two decades. Many new companies have flooded in and have increased the number of options that the investors have on their deck. However, with such an influx of options, it has become reasonably difficult to identify which funds shall be chosen. The even bigger issue that is faced sometimes is the category to pick, which further makes the investment procedure a bit tricky.

Nevertheless, investing in Large Cap Mutual Funds has always been a good option to create a comprehensive portfolio, both for aggressive as well as conservative investors. While the former can incorporate the flavor of diversification with these funds, the latter enjoy the great risk cover provided by this category funds.

Now, as an investor, it isn’t enough to know which category funds are available in the market. A good investment plan demands a deep understanding of the fund lines that you are interested in, the products that you are thinking of picking up for your portfolio, as well as how long you shall keep yourself placed in the same funds. All of these questions from the base for a rewarding investment plan, and thus our expert at CL King and Associates are going to discuss these points in detail in this article.

 

Understanding Large Cap Funds

As you might already know, mutual funds are broadly divided into two principal categories: Equity and Debt. These two categories are further sub-divided into different types of options to suit different investors needs. Large Caps are one such sub-division of the Equity mutual funds, where the major chunk of the investors money is placed into the stocks of the large, established companies of the market having a market capitalization value of more than $10 billion.

In other words, large cap companies are those who have successfully passed the premature stages of their existence, and have now grown to be the leaders of their particular field. They are relatively much more stable than the mid cap companies in case of volatile market conditions, thus spewing stabler returns overtime. Hence, large caps are a great source to incorporate stability in the portfolio as their stocks do not easily fall prey to turbulent market conditions. The history has it for us that Large Cap companies are too good to fail in the market because it is highly unlikely that they will ever fall short of earning revenue, or will go bankrupt in desperate economic conditions.

 

To Whom Large Caps Suit the Best?

Investing in mutual funds is always influenced by the individuals investment objectives, their risk tolerance and for how long they are interested in staying invested. Large Cap Funds are an ideal choice for those who want to earn steady profits without getting bruised be heavy risks. Moderate risk takers can also obtain advantage of steady and stable returns by investing in Large Caps.

For novices and first-time investors, Large Cap stocks are a great way to start their investment journey as they are not putting themselves at high risk and even then they are enjoying steady returns. However, it should be noted that even the best Large Cap Mutual Funds may not fetch high returns in the times of favourable market conditions, but rest assured your funds will be way too stable in the situations of turmoil.

 

Something More

While Large Cap Funds are one of the best ways to incorporate stability and earn good returns, it shall be taken care of that you choose only those funds that are capable enough of meeting your objectives. Picking any random fund is not going to be of any help, and instead may slow down the process of covering your objectives if it doesn’t suit your profile. Hence, it is suggested that you do some introspection and find out which kind of investor are you exactly. You can take the help of your fund advisor and even find some really helpful tips on the internet that will speed up the process of your fund selection.

 

While investing in the best Large Cap Funds will surely be an added advantage to your investment plan, care should be taken that you select something that suits you the best and not what is running the best in the market. So, don’t rush but take some time in figuring out what is apt for you because in the end it will all be worth it.

If you want to learn more, consult with the experts at CL King and Associates. You can call at 518.447.8050

Why Institutional Investors Are Taking Another Look at UK Land

It seems that if property funds have succeeded in Asia, in other parts of Europe and elsewhere, it should be a no-brainer to invest in a country where a million households are waiting for a place to move.

 

But it's a complicated situation. Why is it that institutional investing in residential assets in the UK has lagged until recently? Indeed, institutional investors hold only about 1 per cent of the total residential stock in the country. Compare this to places such as France and Scandinavian countries, where pension funds and insurance companies hold between 10 and 15 per cent of housing.

 

Some say it has to do with scale, because funds are not typically drawn to smaller developments. But what may change this are government policies relative to housing and an increasing rental market. Larger multi-family construction can yield the asset growth that institutions and larger investment groups are looking for.

 

Financing in the form of sale-leaseback terms also offers a creative means for institutional investors to participate in housing. For example, M&G Investments purchased 400 properties for rent inside the east London Stratford Halo tower block, which it leases back to the Genesis Housing Association, which will manage it for 35 years as it makes payments to M&G. The investors maintain ownership over a longer-term, including after the end of the leaseback deal. Payments are linked to inflation, part of what makes the deal attractive to the investors.

 

This may not be the stream of rental income over time that some investors seek, but it can deliver substantial returns in as little as 18 months. A diversified portfolio often has room for this kind of investment.

 

The fact that Chinese outbound investments are up 80 per cent, year on year, in 2014 suggested there simply was more capital pushing investment - which can be good for the UK. According to numbers reported by real estate company JLL, slowing growth at home in China is pushing money overseas, with global gateway cities such as London among those receiving the most influx of cash. JLL states that while the office sector is a preferred asset class, there is increasing interest in residential development.

 

This of course comes a few years after investors of all types from the Middle East, Russia and elsewhere discovered that UK residential property - particularly in London, of course - can be a safe haven for their money. With greater familiarity of the UK housing development opportunities, there is increasing private and institutional investment to other parts of England as well.

 

Institutional investors of course employ analysts and economists to determine where best to put their money. Individual investors should instead work with an independent financial advisor or firm like CL King and Associates to assess specific investments and to develop an overall portfolio strategy.

 

For more details, consider the consulting services of CL King and Associates. C.L. King has hosted over 5,000 one-on-one or group meetings among nearly 200 different company managements and institutional investors in key cities throughout the U.S. With this huge experience the firm is definite to assist you with your investment goals. You can call at 518.447.8050

Learn How to Evaluate the Market With Technical Stock Analysis

For stock traders, any edge is important to keep competition at bay. Technical stock analysis is one such tool that can be used by traders to keep ahead of the other brokers. Using all the instruments and charts available like price direction, trend lines, the peaks and valleys, support levels, the trader will be able to forecast market pattern. Basically if the market is up, you want to buy. When you find yourself at the other end of the spectrum, then you should look to sell. If the trend is moving sideways, you stay put.

 

Fundamental analysis or stocks technical analysis?

There are two principals used in stock trading. Fundamental analysis deals with real-time situation based on market data driven by supply and demand. Its Economics 101 essentially: when demand is up or supply is down, the price goes up. It all depends on the intrinsic value which will determines whether the market price is overvalued or undervalued.

Technical stock analysis, meanwhile, is interested the market action caused by price and volume. To simplify and sum up the difference among the two schools of thought, it's a question of cause and effect. Fundamentalists are more focused on triggers price movement whiles advocates of technical analysis in stocks are put more emphasis on the outcome.

 

The foundation of stocks technical analysis

Proponents of this method based their assumptions on three tenets: that studying the movement of the price already covers all the other intangibles (like politics or strength of the currency, for example), so they are not overly concerned about all those external factors. Second, price trends do not exist in a vacuum. According to the principal of technical stock analysis, the market price actually follows a cyclical pattern. What happened before will happen again because of, strangely enough, human fallibility. By studying these patterns and trends, the trader can expect when the price will goes up or down and make the corresponding decision before anybody else does.

 

Is technical stocks analysis right for you?

As you may have realized, technical analysis requires a basic understanding of how stocks work, or advanced knowledge on mathematical or logarithmic calibrations. Online platforms on stocks and indices will only get you so much as the principal is anchored on human experience, knowledge and expertise. You need to find some sense between all those graphs and charts, identify reversal and continuation price patterns, the leading or lagging markers.

 

All these tools and principals are used to help you make three major choices: weather you go long (meaning you decide to buy); go short (or decide to sell); then finally do sit idle if the market moves sideward. By using the principal of stocks technical analysis, and using online platforms that track down market volume and price, you would be able to arrive at the best decision.

 

For more info and help you can rely on a team of professionals share market analysts, like the one CL King & Associates. Equipped with such analytical capabilities, CL King is able to offer investment management services, inclusive of equity investment, portfolio management, etc.

Call at 518.447.8647

What's Your Investment Risk Strategy?

Sensible investment and wealth management requires a balance between your risk profile and investment portfolio volatility.
Both of these factors can be combined to make up your investment policy and investment philosophy.

It's important to understand that your risk profile is really comprised of two aspects; your risk attitude and your risk capacity. Risk attitude is the true measure of your personal comfort with risk. Are you willing to risk a less favorable outcome whilst attempting to achieve a more favorable one? (Risk vs. return).

 

Risk capacity is your ability to sustain a less favorable outcome without jeopardizing your original goals and objectives. Risk capacity is affected by factors such as time horizon (allowing you time to recover from an adverse return) and total wealth (allowing you to go through a decline in account value and still maintain your desired spending).

 

The two areas are as important as each other and it is vital that you take both into account when making important investment decisions. For example, if your risk attitude means that you could sustain a 25% market decline without any impact on your goals, the appropriate portfolio may contain 60-80% equities.

However, if your risk attitude measure indicates that any decline in excess of 10% would cause you cold sweats and sleepless nights, then the 60-80% equity portfolio is clearly not the right approach. Instead, you should invest in a portfolio with a lower percentage of equities.

 

So, how can you address your full risk profile?


There are two keys suggested by the experts at CL King & Associates, Inc:

First, you must obtain a true measure of your risk attitude.
This can be obtained by using a comprehensive risk profiling system. You won't be able to achieve this by second guessing it yourself, as it's highly unlikely you'll know enough for the assessment to be successful. You should speak to your Financial Adviser/Planner and ask them what they're using.
You should then make sure you interpret the score correctly and are able to act upon the information effectively.

 

Secondly, you should work through a process of financial planning to determine your true goals and objectives. This step is CRUCIAL as without it, how will you know what your tolerance is for risk capacity (i.e. how will you know how much loss you can absorb without it affecting the likelihood of you achieving your goals).

Once you know how much downside you can tolerate, you can then determine what the appropriate investment policy should be, using risk attitude as a constraint. This should lead you towards deciding what percentage of equities you want in your portfolio.

 

The alternative approach is that you remain invested in a higher percentage of equities, but prepare yourself that you may need to adjust your goals (retire later, spend less, spend more, etc) if the portfolio value falls too much. Of course, you may reach your goals sooner if the higher risk portfolio grows at a faster rate than the lower risk portfolio.

 

The Financial Tips Bottom Line
When you break it all down, it's more than likely that you're trying to achieve your goals and objectives in some form. And most people would rather try and reach their goals with the minimum amount of risk.

 

ACTION POINT
The subject of investment risk should not be underestimated. If all you've done up to now is assess your risk on a scale of 1-10 (and believe me, this is VERY common), maybe it's time to take a more comprehensive approach. After all it's only going to improve your understanding of your own risk tolerance and how much risk you can afford to take.

 

If you have any queries then consult with the experts at CL King. The firm offers investment research, equity and fixed income sales and trading, prime brokerage, investment advisory, and clearing services. Call at 518.447.8647

Investment Banking Role In The Society

Investment banking is a particular banking system that allows customers to invest their money directly or indirectly and also helps companies, government and individual raise fund by means of bond selling, security sales, mergers and acquisitions and issuing of IPO. Investment banking gives both the learned and the novice in the investment industry the opportunity to maximize better dividend of their business or property by way of mergers and acquisitions.
 
Investment banking Online
 
Investment banking helps to boost the economy of the commercial sections of the society in other words they create more opportunity for both the employed and unemployed ones to raise capital and make profit.
 
They also help boost the financial security of a country from possible financial drop down. Every economy that wants to have a growing financial status must require the services of investment banking.
 
DUTIES, SERVICES AND FUNCTIONS OF INVESTMENT BANKING
 
The investment bank like CL King & Associates is a financial institution that helps corporate organizations, company and individual persons to raise enough capital to invest in their projects. Investment banking is all about money and security trading, turning the paper works into real money. They also helps to advice you on the proper kind of investment to invest your money into at the right time, in other words they give professional advice on when to issue a sell or buy request for stocks, bonds and securities, or better still invest the money for you if given the veto power.
 
Investment banking duties and functions
 
 
  • Invest your money: Unlike the commercial banks that helps you to invest your money directly where you deposit and withdraw money; the investment banks indirectly helps you invest your money in a chosen market, though this may not be done directly but you would surely get a maximum returns on your securities. After Gramm-Leach-Bliley Act in 1999, the investment bank and commercial bank in the US can be incorporated thereby giving them more rooms for many services. Though the major duties of the investment bank is to offer viable and reliable advice on how to invest your money properly, buying and selling of acquisitions and trading on stocks and bonds.
 
  • Sales of company stocks: Another duty of investment banking is the sales of company shares and bond in order to raise funds and capital for government, corporations, companies and individuals. This is to aid the corporation to raise enough capital funds for the executions of projects and acquire more property for business.
 
  • Buy securities: They also help corporate bodies to buy shares which they believe have a good value and have a ready and standby buyer whom would make a higher bargain. They act more or less like the stockbroker when it comes to buying and selling of shares. These securities when traded could help the company in raising more capital.
 
  • Managing assets and investment portfolios: Investment banking also helps to manage your assets. As a corporate body or even a business man, you need the services of an investment bank to help you in the management of your assets, properties and finance. In a growing business where more of the finance comes from either the public or banks, there is a higher need of an investment banks to do the proper management of both the assets and finance.
 
  • Offer good financial advice: One of the functions of a good investment banker is to offer a good and profitable financial advice to clients. This professional advice requires proper research on when to issue shares to the public in order to raise funds, when not to issue public shares and also when to acquire a merger. All these and more are the professional duties of an investment banker. Though there is no 100% assurance that with an investment bank you would get the best deal, but they would actually help to aid you in getting a better and fairer deal especially on merger acquisitions.

Choosing an Investment Banking Company - Factors to Consider

If you want to sell your business to raise capital or to make a huge investment, you can get the help you need from an investment bank like CL King & Associates. These are many investment firms and finding the best one is not always easy. It is important to note that some companies are better than others are and it helps to take your time to research the options so that you can make the best decision. There are some qualities to look for when choosing the best firm.

 

Get recommendations

One of the best ways to ensure that you get the best investment banking company is by getting recommendations. Those who have benefited from the services are in the best position to offer you the benefit of their experience. A good investment banker can be a real blessing when you need to raise capital for your business. You can propel your business to greater heights by getting the right person or firm. A good banker will help to ensure that you get the guaranteed capital, while assuming all the risk.

 

Good relationship

When choosing the company, one of the most important factors to consider is the relationship. Building a relationship that is based on trust is very important. You have a lot at stake when you embark on the process and it helps to look for a firm that you are comfortable with. Talk to several candidates to determine important issues like trustworthiness, likeability and good communication style. If you find that you do not feel comfortable with the candidate during the interview process, look elsewhere.

 

Consider expertise

When looking for the best investment banker, you need to consider the expertise. The bankers often specialize in different market sectors or industries and it helps to find someone who deals with your type of business. Someone who is knowledgeable about your type of business is in the best position to offer advice about the value of the company and will know where to find potential investors. The more knowledge the banker has about your company or industry, the easier it will be to attract investors and get you the guaranteed capital.

 

Look for experience

Experience is one of the most valuable qualities in investment banking. It is important to look for a company that has been in business for a long time. This business can be quite speculative and it helps to have someone who has seen and done it all representing your business. Experience helps to build confidence, which often results in increased profitability.

The success of the venture will depend largely on the size and maturity of your business in order to attract interest.

 

If you want to learn more, then consult with the experts at CL King. Call at 518.447.8647

Ways to Find a Conservative Investment Strategy

Most local banks are indulging to take over the investment banking business, and some highly under-leveraged companies have gained a lot and showed maximum growth. These companies are now progressively tapping onto a new investment through equity offerings to subsidize growth plans.

 

Banks and their mode of operation

A majority of banks serves their customers in the most common sector teams such as Telecommunications, Media, Commodities, Healthcare, Real Estate and Fiscal Institutions. Depending on the requirements of the client, the bank tender services, ranging from Acquisitions to Equity and Financing to share sales. Some of the Bankers get references from customers all the way through their Capital Management Division. This division also handles resources of professionals such as Executive Officers and Business Owners.

 

Major players in the Sector

The capital raising bankers indulge in selling securities with the intention of raising capital for businesses. On the buying-side, there are other Institutional Buyers, Private Equity Funds, and Hedge Funds. These are mostly in the case of initial public share offering, including the community as an important section. There is an involvement of brokers who finance the public shares to alleviate some threat. Another part is played by rating agencies who have an effect on the cost of the securities sold.

 

Career Prospects at Global Banks

In some regional banks, individuals are hardly ever paid higher than that of Corporate Finance Bankers. Most qualified graduates struggle for a job, particularly at global banks. Some of them follow their Management or Chartered Accountant credentials for an opportunity of an interview. The typical chain of command at a Bank is Accountant - Associate - Manager - Director - Chief Managing Director. Many graduates join the bank and acquire promotion without pursuing any higher studies.

 

Understanding from the last crisis

Whether it's a short-term capital investment or long-term capital investment, there are two phenomena to understand. The first one is insignificant, and has less carry out with basic realities. The second one is investment oriented, and linked to the rising of the capital in a new perspective. There are investments that incorporate venture capital and long-standing portfolio investments. The flow of capital should be completely encouraged, and the beginning of economically oriented capital controls is a good initiative. An integral part of the International Financial Planning should be under control of tentative money in recreation of ever higher yields. The capital markets grant yields linked to economic crisis and the aspect of things must be at least defied.

 

If you want to learn more, then consult with the experts at CL King and Associates. Call at 518.447.8647 or visit http://www.clking.com/

Corporate Finance Consulting - Trendy Assistant To Financing

Finance is now part of most common and trivial activities of routine life. Be it marketing, selling any wares, assistance to any person in any form, finance forms the core element. Finance having widespread branches is not merely confined to regular chores of life. In tune of this discussion, comes the concept of corporate finance. Corporate finance, as the name suggests, deals with the sources of funding for big corporate houses and multi-national companies. It is the steps taken by managers to make the body corporate more viable and lucrative to share-holders and the tools and scrutiny deployed for allocation of financial resources.

 

As Corporate Finance is big in itself, there are a number of streams of work associated with it. Such activities come under the purview of corporate finance service. These services include a wide range of assistance like managing money, which includes banks, credit-card companies, insurance companies, accountancy firms, investment management companies, stock broking firms -to name a few. Many of them provide a series of services under one umbrella.

 

Corporate Finance is quite complicated, specially to an organization or a person just being a fresher and thus comes the idea of Corporate Financial Advisory. The basic ideology behind this is the variety of advisory services that are offered to the MNCs and conglomerates about the financial aspects of operations. Such services may either be provided by Boards of the companies constituted particularly to give shape to this idea or by bodies of professionals, being experts. Moreover, among the numerous finance service, which one is the best suited for a particular company is best judged by Corporate Financial Advisory.

 

The foundation on which the work of a Corporate Financial Adviser is based on is facilitating mergers and acquisitions, joint venture, disposals, apart from others. They are often found in consortium with large investment banks or corporate advisory firms.

 

It may be pertinent to mention here that strategies that are adopted for a specific company is totally different from that of another.. Strategies are the clever techniques that are adopted to tide over war-like situations. These strategies are being designed by Corporate Finance Consulting mechanism. The work is basically the linking of capital markets ideologies, corporate strategies and financial strategies to help executives and their teams for value-addition purposes.

 

Worldwide there have been quite a few firms well-known in their area of expertise as corporate financial consultants. CL King is one of the most experienced firms in this field.
CL King provides investment banking, equity research, sales and trading, and investor services to corporations and institutions. CL King’s Corporate Services unit offers specialized services and objective advice to help corporate clients achieve flawless execution directly in the capital markets.

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