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 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
NPV Vs ROI Vs EVA – What are the Differences? Read More »
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
What is a Lender of Last Resort? Read More »
Internal and external sources of financing help businesses fulfill their capital requirements. Both types of financing offer discrete benefits and some limitations to the business. Let us discuss what are external and internal sources of financing and their key differences. What are Internal Sources of Financing? Internal sources of financing are the financial sources of
Internal Vs External Sources of Finance – Key Differences Read More »
Mutual funds and hedge funds are pooled investment vehicles. However, both of these types attract different types of investors and follow contrasting investment strategies. Let us discuss what are mutual funds and hedge funds and their key differences. What is a Mutual Fund? A mutual fund is a pooled investment that collects money from several
Mutual Funds Vs Hedge Funds: What Are the Differences? Read More »
Hedge funds and private equity funds are pooled investments that offer high investment returns to investors. Both types of funds seek similar investment goals with contrasting tactics. Let us discuss what are hedge funds and private equity funds and their key differences. What is a Hedge Fund? Hedge funds are pooled investments that seek high
Hedge Fund Vs Private Equity Fund – What are the Key Differences? Read More »
