2. Real Assets Vs Financial Assets
Real Assets produces goods and services where as
Financial Assets define the income or wealth
among investors
Real assets appear only on the asset side of
balance sheet where as financial assets always
appear on both side of balance sheet
Financial Assets are created and destroyed in the
ordinary course of doing business but real assets
are destroyed only by accident or wearing out over
the time.
3. Clients of the Financial System
The household sector
The business sector
The government sector
4. Market and Market Structure
Direct search market
Brokered market
Dealer market
Auction market
5. On Going Trends
Globalization
Securitization
Financial Engineering
Revolution in information and communication
networks
6. What Is Security Analysis?
The entire process of estimating return and risk for
individual securities is known as security analysis
Modern security analysis differ in emphasis from
traditional security analysis, the former
emphasizes risk and return estimates and the later
emphasizes the calculation of an intrinsic value.
7. Portfolio Management
Portfolios are combinations of assets. In this text,
portfolios will consist of collection of securities.
Traditional portfolio planning was all about
personal needs and desire of the investors.
Modern portfolio theory follows a more scientific
approach. It is based more on the risk and return
and also the investors attitude towards risk
8. Investment Versus Speculation
An Investment is a commitment of funds made in
the expectation of some positive rate of return.
Investment is distinguished from speculation by
the time horizon and risk-return characteristics of
the investment.
Same stock or financial instrument may used for
investment or speculation based on intense and
characteristics of risk-return.
9. The Investment Process
Security Analysis
The Computer and Investment Analysis
Portfolio Management
10. Investment Categories
Debt Instruments
Institutional Deposits and Contracts
Government Debt Securities
Private Issues
International Bond Investing
Equity
Equity investments via institutions
Variable annuities
Insurance policies
11. Continue…
Direct Equity Investments
Common Stock
Stock Split
Stock Dividends
Preferred Stock
International Equity
Real Estate
Options and Futures