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, […]
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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
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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.
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What is Throughput Accounting? Throughput accounting is a process used in management accounting that focuses on a company’s production efficiency. It looks at the rate at which a company converts its raw materials into finished goods and makes money from them. The purpose of throughput accounting is to identify any bottlenecks in a production process.
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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
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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
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Most companies prepare their financial statements in their local currency. This currency is the same in which these companies transact. For example, a company that reports its financial statements in dollars may also conduct its operations in the same currency. For some companies, however, the same may not apply, as these currencies may differ. Some
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For companies that sell products, inventory makes up a large portion of their assets. This inventory may include any stock that companies use to manufacture products. It constitutes both raw materials and finished goods. For some companies, any items that are still a part of the production process are also a part of the inventory,
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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
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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
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