Financial services

Financial services is an intermediary activity involved in security the saving of the public fund and facilitating them to be available to the needy for investment.The presence of well organized financial system is highly imperative for the development of any country.Financial system is the nerve point which are accelerate the economic growth. Role of financial… Continue reading Financial services

Bonds

Investment media includes bonds and debentures. This form of investment needs of a risk avertor who is primarily interested in steady returns. Coupled with the safety of the principal sum. Definition of bond A debenture is a legal document containing an acknowledgment of indebtness by a company. It contains a promise to pay a stated… Continue reading Bonds

Active equity management

The security analyst always faced with the problem of buy hold or sell decision.He/she must evaluate the past performance of the security for forecasting the future performance. Valuation of preference share and bond is straight forward because return generally constant and certain.Equity valuation is different because return on equity is uncertain and it can change… Continue reading Active equity management

Financial Leverage

Financial leverage refers to debt a firm’s capital structure. Firms with debt in the capital structure is called levered firms. The inter firm’s irrespective of the firm’s earnings. Hence, interest charges are fixed costs of debt financing. The fixed financial costs result in financial leverage and cause profit after tax to vary with change in EBIT.… Continue reading Financial Leverage

Derivative and risk management

A company faces several kind of risk.Unanticipated change in selling price,cost taxes,demand,interest rate technology fluctuated profitability of a firm.Sometime managers are not able to reduce risk.They try many strategies.All financial difficulties and risk can reduce their risk entering into financial contracts. Risk hedging by derivatives  The topic will explain what is derivatives and how to hedge risk… Continue reading Derivative and risk management

Beta Estimation

The security ‘s beta, which measures the sensitivity of the security ‘s return to those of the market because beta captures the market risk of security as opposed to its diversifiable risk, it is the appropriate measure of risk or a wealth diversified investor.                 Using historical returnsWe would like to know… Continue reading Beta Estimation