Financial Market and its Characteristics: In the economic sense, investment means the commitment of funds to capital assets. Accordingly, the investors are users of funds that they own or acquire in the market.Investors supply the funds by acquiring debt and equity instruments with their savings and they also transfer these instruments among each other. In this connection … [Read more...] about Financial Market and its Characteristics
Finance
What are the Components of Stockholders Equity?
What are the Components of Stockholders Equity?Equity InstrumentsInvestment media representing an ownership position is the equity investment in which the investor is an owner of the firm and is thus entitled to a residual share of profits.Equity instruments differ from fixed income securities in that their returns are not contractual. Returns can be much better or much … [Read more...] about What are the Components of Stockholders Equity?
Common Stock and Preferred Stock
Common Stock and Preferred Stock are two major direct equity investments. When investing directly, investors can choose money market securities, capital market securities or the securities in the derivatives market that include options and financial futures contracts.Common Stock and Preferred StockHowever, the followings are major direct equity investments: Direct Equity … [Read more...] about Common Stock and Preferred Stock
What are the Private debt securities?
Debt Securities: What are the Private debt securities? Private debt securities are issued by corporations and/or both financial and non-financial institutions that run the spectrum in quality and yield.What are the Private debt securities?The categories of these types of securities are furnished below:Debt Securities:Corporate Bonds.When corporations go to the … [Read more...] about What are the Private debt securities?
What are the types of Debt Instruments?
What are the types of Debt Instruments? Debt instruments include all types of fixed-income securities promising the investors that they will receive specific cash flows at specific times in the future. Securities generating one cash flow are known as pre-discount securities or zero-coupon securities. On the other hand, it may involve multiple cash flows. If all the cash flows … [Read more...] about What are the types of Debt Instruments?
Different Exchange Rate Systems with Pros and Cons
Different Exchange Rate Systems. The conversion rate of one currency into another. This rate depends on the local demand for foreign currencies and their local supply, country's trade balance, the strength of its economy, and other such factors. In finance, an exchange rate (also known as a foreign-exchange rate, forex rate, FX rate or Agio) between two currencies is the rate … [Read more...] about Different Exchange Rate Systems with Pros and Cons
Three Important Financial Questions
Three Important Financial QuestionsWhy an increasing working capital is considered a relevant cost for capital expenditure decisions?Net-working capital, as we know, is the amount by which a firm’s current assets exceed its current liabilities. When a firm acquires new machinery to expand its level of operations, it experiences an increase in levels of cash, … [Read more...] about Three Important Financial Questions