FINANCE

​Investment - Introduction to Derivatives Contracts

Investment - Introduction to Derivatives Contracts When you plan a vacation, you do not normally wait until you reach to your chosen destination to book a lodging. Booking a hotel room in advance provides certainty that a room will be available and lock


​Investment -  Comparing Equity and Debt Securities

Investment -  Comparing Equity and Debt Securities  There are considerable risk and return disparities between debt and equity instruments due of differences in cash flows, voting rights, and priority of claims. Risk Debt securities are the least danger


​Investment - Forwards and Futures

Investment - Forwards and Futures Forwards and futures involve duties in the future on the part of both parties to the contract. Forward and futures contracts are frequently termed forward commitments or bilateral contracts because both parties have an ob


​Investment - Functions of Derivative Contracts

Investment - Functions of Derivative Contracts   Uses of Derivatives Contracts Derivatives can be established on any asset, event, or outcome, which is called the underlying. The underlying can be a physical item, such as wheat or gold, or a financial a


Investment - Swap Contracts

Investment - Swap Contracts Swap contracts, or swaps, are often derivatives in which two parties exchange (swap) cash flows or other financial instruments across numerous periods (months or years) for mutual gain, usually to control risk. Swaps of this


​Investment - Private Equity

Investment - Private Equity Consider an entrepreneur who set up her new business five years ago. Back then, she went to her friends and neighbours for the money she needed. Now, five years later, her company is incredibly profitable. To raise the additio


​Investment - Option Contracts

Investment - Option Contracts What if the farmer does not want to lock in the price because the farmer feels the price of wheat is going to increase? But the farmer does want to make sure that at least a certain amount is obtained for the wheat. Similarly


​Investment - Introduction to Alternative Investments

Investment - Introduction to Alternative Investments If a public company needs funds to invest in a project, say to establish a new manufacturing facility or to extend its operations abroad, it may turn to the financial markets and issue the forms of deb


​Investment - Types of Bonds

Investment -  Types of Bonds  Fixed-Rate Bonds Fixed-rate bonds are the major type of debt securities issued by enterprises and governments. A fixed-rate bond has a defined life that ends on the bond’s maturity date, has a coupon rate that does not change


​Investment -  Bond Seniority Ranking

Investment -  Bond Seniority Ranking  The bond indenture offers bondholders the right to take legal action if the issuer fails to fulfill the promised payments or fails to satisfy other requirements mentioned in the contract. If the bond issuer fails to m