This category covers all kinds of topics in finance including corporate finance and financial management. The topics on financial institution and stock exchange will also be included.
Assets under management or AUM are the funds managed by an individual or an institute. These are the total assets managed by the fund managers for their investors. AUM is the indicator of the size and performance of a fund like a mutual fund or hedge fund. Investors and fund managers use this metric as …
Short selling or shorting is a trading strategy that refers to selling borrowed stocks or other investment instruments. Traders look for quick gains when they anticipate a price fall in any of the asset’s prices. It requires a margin account and trades are placed using leverage offered by the brokers. Let us discuss what is …
Short-selling or shorting is a risky trading strategy. It requires careful planning and execution to make it work. That’s why it is recommended for experienced traders only and experts do not suggest it for novice traders. Let us discuss what is the short-selling mechanism, its risks, and its rewards. Short Selling – Mechanism Short selling …
A credit default swap is a financial derivative to swap the credit risk of a debt instrument. It can be used to transfer the default risk of the borrower for any type of debt instrument. Let us discuss what is credit default swap, how it works, and its pros and cons for all parties involved. …
What is Credit Default Swap (CDS)? How Does It Work? Read More »
A wash sale transaction is when taxpayers try to “wash” capital losses on trading transactions. As a taxpayer, you cannot sell a stock at a loss and immediately repurchase the same or identical securities within 30 days. Let us discuss what is the wash sale rule, how it works, and how you can avoid it. …
What is the Wash Sale Rule and How Does it Work? Read More »
Net assets or net asset value is a widely used concept in business valuations and investment fund appraisals. Investors can use NAV as a performance indicator of a mutual fund or ETF. It is the difference between the assets and liabilities of a business or a fund. Let us discuss what is NAV, how to …
What is Net Asset Value (NAV) and How to Calculate it? Read More »
The average true range (ATR) is a technical indicator to give you an idea of how much the price of an asset can move. However, it wouldn’t indicate the direction of the move for you. ATR is a useful metric to assess the price volatility of assets for a given timeframe. It can be used …
What is Average True Range (ATR) and How to Calculate It? Read More »
The cost-to-income or efficiency ratio of a bank is useful efficiency and profitability ratio. It links operating expenses to operating income generated by a business. Let us discuss what is a cost-to-income ratio and why it is important for banks. What is the Cost-to-Income Ratio? The cost-to-income ratio (CIR) is an efficiency metric that compares …
What is the Cost-to-Income Ratio and Why It is Important for Banks? Read More »
What is Net Present Value? The net present value (NPV) refers to the discounted present value of future cash flows (positive and negative) from an investment for a specified period (usually until maturity). In simple words, it is the sum of all future cash flows discounted to the present terms. In practice, it is the …
A lender of the last resort is the rescuer of troubled financial institutes, economies, or countries. It is the type of lender that is used as the last option by the borrower when all other options seem to dry up. Let us discuss what is the lender of last resort, how it works, and its …
