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.
Stock Warrants are derivatives like Options that give a right but not an obligation to the holder to purchase stocks at a specific date with a set price. The investor in these derivatives can exercise the right to fully subscribe to the shares or let them lapse. Warrants are different from Options in a few […]
Stock Warrants: Definition, How It Work, Types and More Read More »
A Banker’s Acceptance (BA) is a type of financial instrument that promises a future payment at a certain date from the bank. It is also known as a bill of exchange. A banker’s acceptance is used as a payment instrument in international trade. It comes with additional features of being marketable security. Hence, it can
Banker’s Acceptance – How Does It Work? Read More »
Straddle and strangle are two options trading strategies. These are volatility strategies. Traders can make profits with these strategies regardless of the market price movement direction. However, both strategies involve significant risks and sophisticated skills to implement correctly. Straddle A straddle is a trading strategy in which a trader holds both put and call options.
Straddles Vs Strangle: What’s the Difference? Read More »
Straddle is a trading strategy that involves buying two options contracts simultaneously; a call option and a buy option. Both contracts should have the same strike price and the same expiration date. It is neutral options trading strategy. Traders use it to earn profits in a volatile market. The profits with a straddle strategy can
Straddle – How Does a Straddle Strategy Work? Read More »
A spread is a trading strategy in options trading that involves two long or short options together. Spreads can be arranged in several ways by adjusting their strike prices for long or short positions, volatility, and expiration dates. In that sense, Options spreads give you more control and choice over options trading. However, these strategies
Call Spread Vs Put Spread: Definition, Types, and Key Differences Read More »
For most companies or businesses, obtaining loans is essential in continuing operations. These loans constitute debt finance for them. There are several benefits that come with this finance source. For example, companies can tax advantages when paying interest on debt finance. However, debt finance may also come with some disadvantages. Every company uses debt finance
Compensating Balance: Meaning and Example Read More »
When companies or businesses make decisions about new projects, they go through complex decision-making processes. One of these processes includes capital budgeting, through which companies can measure the returns they get. Using this process, they can estimate the increase in wealth they can provide shareholders through making investments. There are several tools that companies can
What is Hurdle Rate? Read More »
What is Beta? Beta is a metric used to measure the systematic risk or volatility of a specific security or investment compared to the market. It is one of the critical parts of the capital asset pricing model (CAPM). In that model, it represents the measure of systematic risk for a given security or stock.
How to Calculate Unlevered Beta (Asset Beta or Ungeared Beta)? Read More »
Index Funds comprise securities that follow an index or benchmark. These can be Mutual Funds or Exchange-Traded Funds (ETFs). These funds are passively managed funds and try to copy the securities that are included in the index. Investing in these funds can bring several benefits to investors. It can offer low-cost investment with low-risk options.
Index Funds: Definition, How It Work, and More Read More »
Values funds comprise stocks that are undervalued in the market. These funds can be mutual funds or exchange-traded funds (ETFs). Value funds follow the value investing strategy. These funds are actively managed funds by experts. These funds carefully select the value stocks that are promised to grow in prices. Even if the prices do not
Value Funds: Definition and How It Work Read More »
