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.
A Straight bond is the most basic form of bond. It comes with the most basic features associated with a bond. All other types of bonds are variants of the straight bond. It comes with no special features or variations attached to it. Bonds are debt instruments used by Governments, Municipal Corporations, Large corporate entities, […]
Straight Bonds: Definition and How It Work Read More »
Equity-income funds come through dividends paid on stock investments. These dividends can be in the form of common stocks or preferred stocks. Hence, equity-income funds largely comprise dividend stocks, either common or preferred stocks. Equity-income funds are mutual funds that invest in stocks with regular and established dividend history. These funds aim to offer regular
Equity-Income Funds: Definition and How It Work Read More »
Immunization is the process of securing someone from infectious diseases. Financial experts also use immunization strategies to secure investments against several types of risks. One such risk is the interest rate risk for investors. The interest rate risk is particularly higher for bond investors due to the inverse relation of interest rate and bond prices.
Bond Immunization – How Does It Work? Read More »
What is Capital Budgeting? Capital budgeting is a process that companies or businesses perform when evaluating various capital investment projects. Through this process, they can determine whether a project or investment will be profitable in the future. It helps these companies in making decisions that can provide returns in the long run. It is one
Optimal Capital Budgeting Read More »
What is the Capital Asset Pricing Model (CAPM)? The Capital Asset Pricing Model (CAPM) is a tool that investors and companies use when calculating the cost of capital. This model describes the expected return for assets and the systematic risk involved. Usually, CAPM is a tool that investors use when calculating the expected returns for
Security Market Line (SML) Read More »
Aggressive funds are mutual funds comprising stocks with high growth than the market average. These funds are actively managed by experts to achieve high returns on investments. Due to the fact, these growth funds carry high expense ratios as well. These funds hold individual stocks with mid-cap or small-cap holding labels. These funds carry higher
Aggressive Growth Funds Read More »
A growth fund is a diversified portfolio of stocks with capital price appreciation as their prime objectives. Stocks in Growth funds do not pay dividends or pay little if any. They emphasize reinvesting profits into business development and growth. Value funds, mutual funds, and ETFs are prime examples of growth funds. These funds provide high-growth
What is a Growth Fund? Read More »
Retractable bonds are also called putable bonds or simply put bonds. These bonds come with an additional feature of put option attached with the straight bonds. The put option allows the bondholder to retract principal investment made in the bond. Bond issuers also hold the right to retract the bond in some cases. However, usually,
Retractable Bonds: Definition and How a Retractable Bond Work? Read More »
Extendable bonds come with an option to extend the maturity date of the original bond. The extension can be exercised either by the bond issuer, bondholder, or both, depending on the terms specified. Extendable bonds provide flexible options to both the investor and bondholder. The arrangement can be set to exercise the extension option, once
Extendable Bonds: Definition and How an Extendable Bond Work? Read More »
Eurobonds are commercial bonds that are issued in a currency other than the home currency of the issuer. The bond can be issued in the same country or a foreign country. However, the currency of the bond will be different from the issuer’s base currency. The term “euro” in the name does not specify the
Eurobond – How Does a Eurobond Work? Read More »
