At the most basic level, economics attempts to explain how and why we make the purchasing choices we do. Four key economic concepts—scarcity, supply and demand, costs and benefits, and incentives—can help explain many decisions that humans make
This document discusses national income and wages. It begins with introductions of the presenters and then defines key terms like national income, GDP, GNP, NNP. National income is the total value of goods and services produced in a country in one year. Wages are monetary compensation paid by employers to employees in exchange for work. The document outlines objectives, importance, concepts and components related to national income and wages. It concludes by discussing the Payment of Wages Act of 1936 in India.
Privatisation of life insurance sector in indiaiicecollege
This project is related to life insurance business in India. This study is mainly related to privatization of life insurance sector. LIC was monopoly in insurance sector till 2000.
The decision by IRDA to grant licences to private pledgers in life and non-life sector is expected to increase the insurance business in India. This is bound to board to force existing player to become more competitive thus the buyer can now expect better deals form its insurance agents.
This document provides an overview of the financial sector and insurance industry in Bangladesh. It introduces the presenters and their topic of ethics in the financial sector of Bangladesh. It defines ethics and describes the structure of Bangladesh's formal, semi-formal, and informal financial sectors. The document also outlines the insurance industry in Bangladesh, including the major players like Jiban Bima Corporation and Sadharan Bima Corporation, as well as regulations and types of insurance products. It discusses challenges facing the insurance industry and potential solutions.
This document discusses the recruitment of advisors and sales of financial products through advisors in the life insurance industry in India. It provides background on the history and development of the life insurance sector in India. It describes how advisors, also known as agents, are critical to the distribution and sales process, as they are the primary channel through which insurance companies can explain policies and benefits to customers. The success of insurance companies depends on having an adequate network of agents to capture market share.
“A STUDY OF THE IMPACT OF LIBERALIZATION ON THE INDIAN LIFE INSURANCE INDUSTRY”Somnath Pagar
This study tries to give an overview of the impacts of liberalization and deregulation processes in Indian life insurance industry.And also takes into account the efficiency improvement in the life insurance industry in the wake of deregulation. To sum up, following research questions are answered in the research study.
1) What is the present scenario of the industry? How different it is from the pre liberalization scenario?
2) The competition in the sector is expected to increase. So what is the present state and nature of competition? What changes have taken place in the market structure of life insurance industry?
3) Whether firms are efficient or not? Whether or not the efficiency and of the insurance market is improving after liberalization?
4) How did liberalization contributed in product innovation and customer service benchmark in life insurance industry?
5) What are the implications of liberalization on spread and coverage of social security measures?
*******
Globalisation, liberalisation and privatisation of insuranceHabib Zafar
Globalisation, liberalisation, and privatisation have transformed the insurance industry in India. The Insurance Regulatory and Development Authority Act of 1999 ended state-owned insurers' monopoly and allowed private companies to enter the market. Many private insurers have global insurance companies as partners, bringing foreign investment. While this increased competition benefits consumers, it has also led to consolidation in the industry through mergers and acquisitions. The globalization of insurance continues to impact regulations and the competitive landscape in India.
The document discusses the service sector in India. Some key points:
1) The service sector now accounts for over half (51.16%) of India's GDP, growing from agriculture and industry. This marks a shift to a more developed economy model.
2) Within services, trade and transportation have seen increasing shares of GDP while construction has remained steady.
3) Some economists caution that unchecked service sector growth without corresponding industrial growth could distort the economy.
4) Strong customer satisfaction is vital in the service industry where intangibles are sold. Insurance companies must focus on both sales and customer service.
This document discusses national income and wages. It begins with introductions of the presenters and then defines key terms like national income, GDP, GNP, NNP. National income is the total value of goods and services produced in a country in one year. Wages are monetary compensation paid by employers to employees in exchange for work. The document outlines objectives, importance, concepts and components related to national income and wages. It concludes by discussing the Payment of Wages Act of 1936 in India.
Privatisation of life insurance sector in indiaiicecollege
This project is related to life insurance business in India. This study is mainly related to privatization of life insurance sector. LIC was monopoly in insurance sector till 2000.
The decision by IRDA to grant licences to private pledgers in life and non-life sector is expected to increase the insurance business in India. This is bound to board to force existing player to become more competitive thus the buyer can now expect better deals form its insurance agents.
This document provides an overview of the financial sector and insurance industry in Bangladesh. It introduces the presenters and their topic of ethics in the financial sector of Bangladesh. It defines ethics and describes the structure of Bangladesh's formal, semi-formal, and informal financial sectors. The document also outlines the insurance industry in Bangladesh, including the major players like Jiban Bima Corporation and Sadharan Bima Corporation, as well as regulations and types of insurance products. It discusses challenges facing the insurance industry and potential solutions.
This document discusses the recruitment of advisors and sales of financial products through advisors in the life insurance industry in India. It provides background on the history and development of the life insurance sector in India. It describes how advisors, also known as agents, are critical to the distribution and sales process, as they are the primary channel through which insurance companies can explain policies and benefits to customers. The success of insurance companies depends on having an adequate network of agents to capture market share.
“A STUDY OF THE IMPACT OF LIBERALIZATION ON THE INDIAN LIFE INSURANCE INDUSTRY”Somnath Pagar
This study tries to give an overview of the impacts of liberalization and deregulation processes in Indian life insurance industry.And also takes into account the efficiency improvement in the life insurance industry in the wake of deregulation. To sum up, following research questions are answered in the research study.
1) What is the present scenario of the industry? How different it is from the pre liberalization scenario?
2) The competition in the sector is expected to increase. So what is the present state and nature of competition? What changes have taken place in the market structure of life insurance industry?
3) Whether firms are efficient or not? Whether or not the efficiency and of the insurance market is improving after liberalization?
4) How did liberalization contributed in product innovation and customer service benchmark in life insurance industry?
5) What are the implications of liberalization on spread and coverage of social security measures?
*******
Globalisation, liberalisation and privatisation of insuranceHabib Zafar
Globalisation, liberalisation, and privatisation have transformed the insurance industry in India. The Insurance Regulatory and Development Authority Act of 1999 ended state-owned insurers' monopoly and allowed private companies to enter the market. Many private insurers have global insurance companies as partners, bringing foreign investment. While this increased competition benefits consumers, it has also led to consolidation in the industry through mergers and acquisitions. The globalization of insurance continues to impact regulations and the competitive landscape in India.
The document discusses the service sector in India. Some key points:
1) The service sector now accounts for over half (51.16%) of India's GDP, growing from agriculture and industry. This marks a shift to a more developed economy model.
2) Within services, trade and transportation have seen increasing shares of GDP while construction has remained steady.
3) Some economists caution that unchecked service sector growth without corresponding industrial growth could distort the economy.
4) Strong customer satisfaction is vital in the service industry where intangibles are sold. Insurance companies must focus on both sales and customer service.
Kurnia Asia Berhad was incorporated in Malaysia in 2001 and is the holding company for Kurnia Insurans (Malaysia) Berhad, the largest general insurer in Malaysia. Kurnia Insurans was incorporated in 1978 and has grown to become one of the most successful general insurers in the country, offering products like motor, medical, personal accident, and home insurance. Kurnia Asia aims to be a leading financial services group in ASEAN through its vision, mission, and values of knowledge, unity, nobility, resourcefulness, innovativeness, and ability.
This document provides an overview of the history and concepts of insurance business in Bangladesh. It discusses how insurance began as a way for communities to share risks. Modern insurance contracts emerged in Europe in the 14th century and separate from investment. The development of marine insurance in London in the late 17th century was also outlined. The document defines insurance and explains the basic concept of how a group pools funds to compensate members who suffer losses from shared risks. It provides a brief historical background of insurance in Bangladesh, including nationalization of the industry in 1972.
The document provides information about the role, functions, and services of insurance companies in Bangladesh. It discusses the history and development of insurance in the country, from the origins of fire, marine, and life insurance to the current structure with both state-owned and private insurance companies. It outlines the key services insurance companies provide, including life insurance, general insurance, reinsurance, micro-insurance, and Takaful/Islamic insurance. It also lists the requirements for establishing an insurance company in Bangladesh.
This document presents information about the insurance sector in India. It discusses the privatization of insurance, the growth of major private players in the sector, and the key driving factors such as rising incomes and demand from semi-urban populations. It also outlines some of the challenges and opportunities in the Indian insurance market since privatization, such as the need for effective mass marketing strategies and leveraging new technologies. Overall, the privatization of insurance has led to increased competition, new products, and higher salaries compared to when it was previously dominated by state-owned providers.
The document provides an overview of the general insurance industry in India. It discusses how general insurance started in India in the 19th century under British companies and was later nationalized. It was reopened to private companies in 1999. The summary discusses the key points of the industry's history, current state with low penetration compared to other countries, and future growth potential as regulations open the industry to more private and foreign players.
The document provides an overview of trends in the Indian insurance sector. It discusses the history and development of insurance in India, including the nationalization of life insurance in 1956 and general insurance in 1972. It then summarizes recent trends like the introduction of unit-linked insurance policies and increasing online sales. The objectives of liberalization policies in 1991 that opened the sector to private companies are outlined. Finally, measures taken by regulators to develop the insurance market and protect policyholders are summarized.
This document is a project report submitted by Soumeet D. Sarkar for his M.Com program. It provides an overview of The Oriental Insurance Company Limited, including its history, popular policies, SWOT analysis, and product profile. The report contains chapters on data analysis and collection, including comparative balance sheets and profit/loss accounts, as well as ratios and comments. It aims to provide insight into The Oriental Insurance Company and the insurance industry in India.
The document provides an overview of the life insurance and financial planning industry in India. It discusses key topics such as the historical development of the insurance sector, current regulatory framework, major players and their market shares, various insurance products offered, and distribution channels. The industry is set for rapid growth in the coming years driven by increasing incomes, financial awareness and the entry of private players. Customer service and use of new distribution channels like bancassurance are becoming important for companies to succeed in this competitive environment.
The document is a report analyzing consumer investment behavior and innovation in insurance in the present scenario. It was submitted by Chani Raj in partial fulfillment of an MBA degree. The report includes an acknowledgements section thanking those who provided guidance. It also includes an executive summary outlining the objectives of analyzing consumer behavior, brand awareness, comparing ULIPs, new insurance avenues, and the potential market for ULIPs in Delhi, Gurgaon, Noida, and Greater Noida regions.
The document discusses the history and development of the insurance sector in India. It notes that insurance was initially nationalized and state-owned companies dominated the market. Liberalization in the 1990s allowed private companies to enter the sector. Now there are many private life, health, and general insurance companies operating alongside state-owned insurers, increasing competition and improving customer choice, services and products. However, some risks remain, such as companies prioritizing profits over customers.
This research proposal aims to study customer perception towards purchasing general insurance in Ahmedabad. The study will analyze factors that influence customers' selection of general insurance companies and policies. The objectives are to build a model for determining the key factors that impact policyholders' decisions. This study will help insurance companies understand customer preferences to develop competitive insurance products tailored to customer needs.
A project report on customer perception towards insuranceProjects Kart
The document provides an introduction and overview of the insurance industry in India. It discusses the history and evolution of insurance from ancient times to its nationalization in India in the 1950s. It also summarizes the key types of insurance like life and non-life insurance. The insurance industry in India is categorized into public and private sector for both life and non-life insurance. It provides a breakdown of the major players in both life and non-life insurance sectors in India.
This document provides an introduction to a study on consumers' perceptions of life insurance policies. It discusses how life insurance is important for protecting families financially in cases of death or loss of income. The study aims to understand how consumer perceptions of service quality and product quality differ between life insurance policies offered by different companies. It also provides background definitions and context on insurance, including the different types of insurance, the importance of insurance for society and the economy, and the evolution of the insurance industry in India.
This document defines insurance, describes the two main definitions of insurance (functional and contractual), and outlines the major types of insurance like life, general, health, business, automobile, and fire insurance. It provides details on life insurance corporation of India (LIC), general insurance corporation of India (GIC), and their investment policies. It also discusses the history and development of the insurance industry in India and the role of the insurance regulatory development authority (IRDA).
This document summarizes a presentation on the state, potential, and constraints of the insurance business in Bangladesh. It outlines the objectives of analyzing the current scenario and problems/prospects. It provides historical background on insurance in Bangladesh. It then describes the current state, major problems including social, economic, political, legal, and other issues. It discusses ways to overcome problems and prospects for future growth in areas like population, GDP, new products. It concludes that insurance contributes significantly to the economy by creating savings, capital formation, and more.
Insurance sector in India:challenges and opportunitiessumanjeetkaurgill
1) The document discusses the insurance sector in India, including its history and evolution from the 19th century to present day.
2) It covers the major players like LIC, GIC, and IRDA, and types of insurance policies including life, health, fire, and motor insurance.
3) The current insurance landscape in India is growing rapidly but there remains significant potential for further expansion, as over 75% of the population still lacks insurance coverage.
The document provides an overview of insurance sector advertising in India. It discusses the history and growth of the insurance industry in India from 1818 to present day. It notes that the industry was initially comprised of many private sector companies, but was later nationalized and consolidated into public sector monopolies. Since 2000, the sector has reopened to private and foreign companies. It also summarizes key findings from studies on the impact of advertising on insurance company profitability and market share between public and private insurers over time.
This document provides an introduction to managerial economics. It begins by listing recommended reading materials and then outlines the session objectives, which are to discuss key economic concepts like rational decision making, incentives, and marginal analysis. It then presents a case study on the expansion of the Disney Corporation under Michael Eisner and how managerial economics informed strategies like advertising, pricing, and executive compensation. Another case examines Toyota's production and pricing decisions around the hybrid Prius. The document concludes by defining managerial economics and outlining four key principles of rational decision making: people face tradeoffs, opportunity cost is the relevant cost, people think at the margin, and people respond to incentives.
The government and markets are interdependent and affect people's lives. The government makes rules that establish market boundaries and operations through deliberation. It also controls business activity in a planned economy. For steady economic growth, the government must make suitable policies while the market must follow laws to operate smoothly. Both the government and market play important roles in economic development.
The document provides a history of life insurance in India. It states that insurance was practiced in ancient times in India during the Vedic period. The first Indian life insurance company was established in Bombay in 1818. Several other Indian and foreign insurance companies were established in the late 1800s. The life insurance sector was nationalized in 1956 with the formation of the Life Insurance Corporation of India. General insurance was also nationalized in 1972. The insurance sector was gradually liberalized starting in the 1990s, leading to the establishment of a regulatory body called the Insurance Regulatory and Development Authority in 1999.
Kurnia Asia Berhad was incorporated in Malaysia in 2001 and is the holding company for Kurnia Insurans (Malaysia) Berhad, the largest general insurer in Malaysia. Kurnia Insurans was incorporated in 1978 and has grown to become one of the most successful general insurers in the country, offering products like motor, medical, personal accident, and home insurance. Kurnia Asia aims to be a leading financial services group in ASEAN through its vision, mission, and values of knowledge, unity, nobility, resourcefulness, innovativeness, and ability.
This document provides an overview of the history and concepts of insurance business in Bangladesh. It discusses how insurance began as a way for communities to share risks. Modern insurance contracts emerged in Europe in the 14th century and separate from investment. The development of marine insurance in London in the late 17th century was also outlined. The document defines insurance and explains the basic concept of how a group pools funds to compensate members who suffer losses from shared risks. It provides a brief historical background of insurance in Bangladesh, including nationalization of the industry in 1972.
The document provides information about the role, functions, and services of insurance companies in Bangladesh. It discusses the history and development of insurance in the country, from the origins of fire, marine, and life insurance to the current structure with both state-owned and private insurance companies. It outlines the key services insurance companies provide, including life insurance, general insurance, reinsurance, micro-insurance, and Takaful/Islamic insurance. It also lists the requirements for establishing an insurance company in Bangladesh.
This document presents information about the insurance sector in India. It discusses the privatization of insurance, the growth of major private players in the sector, and the key driving factors such as rising incomes and demand from semi-urban populations. It also outlines some of the challenges and opportunities in the Indian insurance market since privatization, such as the need for effective mass marketing strategies and leveraging new technologies. Overall, the privatization of insurance has led to increased competition, new products, and higher salaries compared to when it was previously dominated by state-owned providers.
The document provides an overview of the general insurance industry in India. It discusses how general insurance started in India in the 19th century under British companies and was later nationalized. It was reopened to private companies in 1999. The summary discusses the key points of the industry's history, current state with low penetration compared to other countries, and future growth potential as regulations open the industry to more private and foreign players.
The document provides an overview of trends in the Indian insurance sector. It discusses the history and development of insurance in India, including the nationalization of life insurance in 1956 and general insurance in 1972. It then summarizes recent trends like the introduction of unit-linked insurance policies and increasing online sales. The objectives of liberalization policies in 1991 that opened the sector to private companies are outlined. Finally, measures taken by regulators to develop the insurance market and protect policyholders are summarized.
This document is a project report submitted by Soumeet D. Sarkar for his M.Com program. It provides an overview of The Oriental Insurance Company Limited, including its history, popular policies, SWOT analysis, and product profile. The report contains chapters on data analysis and collection, including comparative balance sheets and profit/loss accounts, as well as ratios and comments. It aims to provide insight into The Oriental Insurance Company and the insurance industry in India.
The document provides an overview of the life insurance and financial planning industry in India. It discusses key topics such as the historical development of the insurance sector, current regulatory framework, major players and their market shares, various insurance products offered, and distribution channels. The industry is set for rapid growth in the coming years driven by increasing incomes, financial awareness and the entry of private players. Customer service and use of new distribution channels like bancassurance are becoming important for companies to succeed in this competitive environment.
The document is a report analyzing consumer investment behavior and innovation in insurance in the present scenario. It was submitted by Chani Raj in partial fulfillment of an MBA degree. The report includes an acknowledgements section thanking those who provided guidance. It also includes an executive summary outlining the objectives of analyzing consumer behavior, brand awareness, comparing ULIPs, new insurance avenues, and the potential market for ULIPs in Delhi, Gurgaon, Noida, and Greater Noida regions.
The document discusses the history and development of the insurance sector in India. It notes that insurance was initially nationalized and state-owned companies dominated the market. Liberalization in the 1990s allowed private companies to enter the sector. Now there are many private life, health, and general insurance companies operating alongside state-owned insurers, increasing competition and improving customer choice, services and products. However, some risks remain, such as companies prioritizing profits over customers.
This research proposal aims to study customer perception towards purchasing general insurance in Ahmedabad. The study will analyze factors that influence customers' selection of general insurance companies and policies. The objectives are to build a model for determining the key factors that impact policyholders' decisions. This study will help insurance companies understand customer preferences to develop competitive insurance products tailored to customer needs.
A project report on customer perception towards insuranceProjects Kart
The document provides an introduction and overview of the insurance industry in India. It discusses the history and evolution of insurance from ancient times to its nationalization in India in the 1950s. It also summarizes the key types of insurance like life and non-life insurance. The insurance industry in India is categorized into public and private sector for both life and non-life insurance. It provides a breakdown of the major players in both life and non-life insurance sectors in India.
This document provides an introduction to a study on consumers' perceptions of life insurance policies. It discusses how life insurance is important for protecting families financially in cases of death or loss of income. The study aims to understand how consumer perceptions of service quality and product quality differ between life insurance policies offered by different companies. It also provides background definitions and context on insurance, including the different types of insurance, the importance of insurance for society and the economy, and the evolution of the insurance industry in India.
This document defines insurance, describes the two main definitions of insurance (functional and contractual), and outlines the major types of insurance like life, general, health, business, automobile, and fire insurance. It provides details on life insurance corporation of India (LIC), general insurance corporation of India (GIC), and their investment policies. It also discusses the history and development of the insurance industry in India and the role of the insurance regulatory development authority (IRDA).
This document summarizes a presentation on the state, potential, and constraints of the insurance business in Bangladesh. It outlines the objectives of analyzing the current scenario and problems/prospects. It provides historical background on insurance in Bangladesh. It then describes the current state, major problems including social, economic, political, legal, and other issues. It discusses ways to overcome problems and prospects for future growth in areas like population, GDP, new products. It concludes that insurance contributes significantly to the economy by creating savings, capital formation, and more.
Insurance sector in India:challenges and opportunitiessumanjeetkaurgill
1) The document discusses the insurance sector in India, including its history and evolution from the 19th century to present day.
2) It covers the major players like LIC, GIC, and IRDA, and types of insurance policies including life, health, fire, and motor insurance.
3) The current insurance landscape in India is growing rapidly but there remains significant potential for further expansion, as over 75% of the population still lacks insurance coverage.
The document provides an overview of insurance sector advertising in India. It discusses the history and growth of the insurance industry in India from 1818 to present day. It notes that the industry was initially comprised of many private sector companies, but was later nationalized and consolidated into public sector monopolies. Since 2000, the sector has reopened to private and foreign companies. It also summarizes key findings from studies on the impact of advertising on insurance company profitability and market share between public and private insurers over time.
This document provides an introduction to managerial economics. It begins by listing recommended reading materials and then outlines the session objectives, which are to discuss key economic concepts like rational decision making, incentives, and marginal analysis. It then presents a case study on the expansion of the Disney Corporation under Michael Eisner and how managerial economics informed strategies like advertising, pricing, and executive compensation. Another case examines Toyota's production and pricing decisions around the hybrid Prius. The document concludes by defining managerial economics and outlining four key principles of rational decision making: people face tradeoffs, opportunity cost is the relevant cost, people think at the margin, and people respond to incentives.
The government and markets are interdependent and affect people's lives. The government makes rules that establish market boundaries and operations through deliberation. It also controls business activity in a planned economy. For steady economic growth, the government must make suitable policies while the market must follow laws to operate smoothly. Both the government and market play important roles in economic development.
The document provides a history of life insurance in India. It states that insurance was practiced in ancient times in India during the Vedic period. The first Indian life insurance company was established in Bombay in 1818. Several other Indian and foreign insurance companies were established in the late 1800s. The life insurance sector was nationalized in 1956 with the formation of the Life Insurance Corporation of India. General insurance was also nationalized in 1972. The insurance sector was gradually liberalized starting in the 1990s, leading to the establishment of a regulatory body called the Insurance Regulatory and Development Authority in 1999.
Flash Memory, Inc. requires additional working capital to finance forecasted sales growth as it nears its commercial bank's notes payable limit. A financial analysis projects sales, expenses, assets and liabilities for 2010-2012, determining Flash will need $2.6 million in additional financing by 2011 to fund operations and maintain growth. Alternative financing options are explored to provide the necessary working capital without exceeding the notes payable limit.
The Present Situation of Insurance in India and Developments in Private Insur...Praveen Gupta
The last decade has been a slowly unfolding, occasionally frustrating but eventful period for the Indian insurance industry. The dominant theme throughout the 1990s was the liberalization agenda.
A case study on the changing face of insuranceProjects Kart
This document is a project report submitted to Mangalayatan University on the topic of "The changing face of insurance". The report contains sections on organizational structures of ICICI Bank and ICICI Prudential, objectives of the study, research methodology, and chapters introducing concepts of insurance and providing an overview of the Indian insurance sector and history of ICICI Bank and Prudential.
The document provides an overview of hedge funds, including:
1) Hedge funds pool capital from accredited investors to invest in various assets using complex strategies. They aim to generate positive returns regardless of market movements.
2) Regulations require hedge funds over $150M to register with the SEC and allow only accredited investors. Fees typically include a 1-2% management fee and 15-20% performance fee.
3) Hedge funds are classified based on their strategies, such as event driven, equity hedge, macro, and emerging markets. They entail risks including market risk, deal risk, and risks associated with specific positions.
The document is a report analyzing consumer investment behavior and innovation in insurance in the present scenario. It was submitted by Chani Raj in partial fulfillment of an MBA degree. The report includes an acknowledgements section thanking those who provided guidance. It also includes an executive summary outlining the objectives of analyzing consumer behavior, brand awareness, comparing ULIPs, new insurance avenues, and the potential market for ULIPs in Delhi, Gurgaon, Noida, and Greater Noida regions.
Financial Sector Performance and Conceptual FrameworkAtif Ahmed
This document provides an overview of the financial services sector and related concepts. It discusses the history of the sector and how technology has changed operations. The future outlook is uncertain given recent market collapses. It also defines primary and secondary markets, debt and equity, and money and capital markets. Additionally, it outlines different types of financial regulations and describes the US financial industry and subsectors. Finally, it analyzes Pakistan's economic growth rate, inflation rate, and tax-to-GDP ratio over the past decades.
Assignment 1 Discussion QuestionThe management of current asset.docxfredharris32
Assignment 1: Discussion Question
The management of current assets and current liabilities in the short run can lead to several challenges for the financial manager. What are some of the more common challenges or problems encountered by the firm in this regard, and what are the possible solutions? Explain your answers.
Assignment 2: Discussion Question
Financial mangers make decisions today that will affect the firm in the future. The dollars used for investment expenditures made today are different from the cash flows to be realized in the future. What are these differences? What are some of the techniques that can be used to adjust for these differences?
Assignment 3: Discussion Question
Valuation of a firm’s financial assets is said to be based on what is expected in the future, in terms of the future performance of the firm, the industry, and the economy. What types of value would you consider when assigning “value” to a firm’s stock or bond? What is the significance of each of the different types of value in the valuation process? Use examples to support your response.
Assignment 4: Discussion Question
The finance department of a large corporation has evaluated a possible capital project using the NPV method, the Payback Method, and the IRR method. The analysts are puzzled, since the NPV indicated rejection, but the IRR and Payback methods both indicated acceptance. Explain why this conflicting situation might occur and what conclusions the analyst should accept, indicating the shortcomings and the advantages of each method. Assuming the data is correct, which method will most likely provide the most accurate decisions and why?
Course Overview (1 of 3)
Defining Finance
Broadly defined, finance is the study of how people manage scarce resources in general, and money and other financial resources in particular. There are two important features that distinguish financial decisions from other types of decisions. The benefits and costs of financial decisions are spread out over time and usually shrouded in uncertainty.
These decisions are made in a financial environment that includes the financial system, institutions, markets, and participants such as individual households, businesses, and governments. It is important to note that a well developed and properly functioning financial system enables the economy to operate efficiently and contributes to the economic growth and development of the country.
Brief History of Finance
Finance emerged as a separate field of study in the U.S. in the early 1900s. At that time finance was taught primarily as a descriptive subject using anecdotes and rules of thumb. The focus at that time was on the formation of new firms, the various types of securities firms can issue to raise funds and the legal aspects of mergers and acquisitions. This continued to be the focus all through the 1920s.
However, during the 1930s the focus shifted to the study of bankruptcy and reorganization, corporate liqu ...
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Chapter 02_Overview of the Financial SystemRusman Mukhlis
This chapter provides an overview of the financial system, including the functions of financial markets and intermediaries in channeling funds from lenders to borrowers. It describes the structure of markets, such as debt versus equity, and primary versus secondary markets. It also discusses the internationalization of markets and the role of regulation in ensuring stability and transparency.
Special Education Program Evaluation PaperKristin Oliver
Here are the key points made in the passage:
- Iraq has a large "underground economy" as a side effect of its bureaucracy and corruption. Private businesses face difficulties and expenses to operate legally.
- To operate, private businesses must choose between seeking legal status, which is difficult and expensive due to regulations, or operating underground with inefficiencies.
- Both legal and underground businesses must pay bribes to corrupt officials, with one survey finding 1/5 of private firms pay 40% or more of revenues in bribes.
- Excluding agriculture, an estimated 6% of the labor force works for legal private enterprises, while 20% works in the underground economy.
- Underground businesses tend to be small
ADBI Working Paper Series Financial Inclusion and Financial Stability: Curren...Dr Lendy Spires
This document discusses financial inclusion and financial stability. It argues that greater financial inclusion can enhance financial stability in several ways:
1) Financial inclusion poses risks at the institutional level but these are not systemic in nature, as evidence shows that low-income groups maintain solid financial behavior during crises.
2) The risk profile of inclusive institutions is characterized by many small clients and transactions, posing minimal risk to financial stability.
3) Risks at the institutional level can be managed with prudent tools and effective consumer protection. Potential costs of inclusion are outweighed by long-term benefits of a deeper, more diversified financial system.
This document discusses financial inclusion and financial stability. It argues that greater financial inclusion can enhance financial stability by cushioning the impact of financial crises at the local level. While financial inclusion poses some risks at the institutional level, these are not systemic in nature and can be managed with prudent regulation. The potential costs of inclusion are outweighed by long-term benefits of a deeper, more diversified financial system that is more resilient to shocks. Innovations to promote inclusion may strengthen financial systems rather than weakening them.
This document contains summaries of presentations from 5 different speakers on various financial topics:
1) Nilesh Sawant and Rajendra Agarwal spoke about their careers in law and the textile industry respectively, emphasizing the importance of understanding clients, quality service, and adapting to changes.
2) Anil Sachidanand discussed his career progression at DHFL and differences between the working cultures in India and the US.
3) The first video discussed retirement planning, asset allocation, and medical expenses increasing with age.
4) The second video covered capital markets, stock exchanges, and participants in the market like FIIs and retail investors.
5) The last video defined mutual funds and their different types based
file:///C|/Users/linziyu/Downloads/Case%20Study%20Grading%20Criteria.html[10/5/2016 5:52:48 PM]
Case Studies: The practical application of business skills.
Case studies give you a chance to apply your growing knowledge of business principles across many
important topics. These homework assignments take time to do well. Allow at least 1-2+ hours to prepare
your answers for these case studies. Don't wait until the last minute to complete these assignments. It will
add unneeded stress to you life. Take the time to do your best. You'll be glad you did! You will also learn so
much more in this class.
Your grade will be determined by the following factors:
1) Your thoughtful analysis of each question
Demonstrate the ability to use both video info and textbook info to answer each question
Identify the key, most relevant information provided within the video
Explain how this information relates back to the chapter content in our textbook
Include appropriate level detail and insight in each of your answers
Use relevant business vocabulary from our textbook
2) Use of at least one independent research source to support your answers
3) Use of MLA citations in each of your answers as appropriate for all research reference
(including our textbook & case video)
4) Inclusion of a Works Cited section (e.g. MLA formatted bibliography)
Include at the conclusion of each assignment
List each of the research sources used
Include our textbook and case video info every time
5) Use of appropriate grammar and accurate spelling
At least 1-2 detailed paragraphs per question are required to receive the maximum points for each case.
Overly brief answers will not receive full credit. Each question must be answered. Unanswered questions
will significantly lower your grade. You homework submission should be well organized and well written.
Homework will be graded within one week of the homework due date unless you are advised otherwise.
Local DiskC:\Users\linziyu\Downloads\Case Study Grading Criteria.html
file:///C|/Users/linziyu/Downloads/Example%20Case%20Study%20Submission.html[10/5/2016 5:55:09 PM]
Abide Fghijlk
Introduction to Business
Professor Maros
Chapter 2 Case Study: Fresher than Fresh - Economics and how businesses can build and
distribute wealth
1) Explain how Lindsay obtained the funding to start her business.
In the Fresher Than Fresh (FTF) video, Lindsay explains that she started financing her business out of her
own pocket. However, she soon realized that she would incur a lot of expenses because of her desire have
her products be 100% organic. She received some financing from investors who wanted to see her business
succeed. 80% of these investments were made by local people who trusted in Lindsay and believe that this
business was going to be successful.
2) Explain the different economic systems and how Lindsay's business might fare under each one.
According to ...
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
Main Java[All of the Base Concepts}.docxadhitya5119
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
Communicating effectively and consistently with students can help them feel at ease during their learning experience and provide the instructor with a communication trail to track the course's progress. This workshop will take you through constructing an engaging course container to facilitate effective communication.
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
"Learn about all the ways Walmart supports nonprofit organizations.
You will hear from Liz Willett, the Head of Nonprofits, and hear about what Walmart is doing to help nonprofits, including Walmart Business and Spark Good. Walmart Business+ is a new offer for nonprofits that offers discounts and also streamlines nonprofits order and expense tracking, saving time and money.
The webinar may also give some examples on how nonprofits can best leverage Walmart Business+.
The event will cover the following::
Walmart Business + (https://business.walmart.com/plus) is a new shopping experience for nonprofits, schools, and local business customers that connects an exclusive online shopping experience to stores. Benefits include free delivery and shipping, a 'Spend Analytics” feature, special discounts, deals and tax-exempt shopping.
Special TechSoup offer for a free 180 days membership, and up to $150 in discounts on eligible orders.
Spark Good (walmart.com/sparkgood) is a charitable platform that enables nonprofits to receive donations directly from customers and associates.
Answers about how you can do more with Walmart!"
How to Setup Warehouse & Location in Odoo 17 InventoryCeline George
In this slide, we'll explore how to set up warehouses and locations in Odoo 17 Inventory. This will help us manage our stock effectively, track inventory levels, and streamline warehouse operations.
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
हिंदी वर्णमाला पीपीटी, hindi alphabet PPT presentation, hindi varnamala PPT, Hindi Varnamala pdf, हिंदी स्वर, हिंदी व्यंजन, sikhiye hindi varnmala, dr. mulla adam ali, hindi language and literature, hindi alphabet with drawing, hindi alphabet pdf, hindi varnamala for childrens, hindi language, hindi varnamala practice for kids, https://www.drmullaadamali.com
Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
1. ECONOMIC TERMS AND CONCEPTS PART 1
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WHY OUR COURSE!
1) 1) Save Videos offline
2) 2) Downloadable & printable PDFs
3) 3) Weekly Revision Class -
#2019Pledge
4) 4) Sectional Tests &
Comprehensive Mocks with All
India Ranking System
5) 5) We Check Your English Papers.
English is the most scoring in
Phase 2.
6)
3. ECONOMIC TERMS AND CONCEPTS PART 1
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ECONOMIC TERMS AND CONCEPTS
Accrual basis:
An accounting method which considers revenues and expenses as they accrue, even the
cash would not have been received or paid during the period of accrual. Accrual principle is
one of the important principles of accounting.
Only Indian Railways still relies on Cash Basis of Accounting. All other major government and
private organizations rely on accrual principle.
Activity rate / Labor Force Participation Rate:
The ratio of labor force of a country to the populations is known as the activity rate or
participation rate. It is in per cent and always a proportion of the total population of the
country - the economically active population. The rate varies from one country to another
depending upon several factors such as school leaving age, retirement age, popularity of
Higher Education, social customs, opportunities, etc.
ADS conversion offer:
Conversion of local shares into American Depositary Shares(ADS) of a company is called an
ADS conversion offer.
The offer allows local (indian) investors to convert their shares into ADS and sell it in the US
markets.
The investment proceeds are distributed among Indian investors.
The company under ADS does not issue new shares. Existing shares are converted into ADS.
The scheme can only be used by companies listed on both Indian and American markets.
Adverse selection:
Adverse selection is used in Insurance business.
In a case where there is asymmetry in information between the seller and buyer of an
insurance policy in favor of the buyer because buyer has access to information that seller
(company) does not, there is said to be adverse selection.
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The other kind of market failure is moral hazard.
Adverse selection is one among the two kinds of the market failure often associated with
insurance business which means doing business with the people one would have better
avoided.
Agricultural labourer:
A person who work on another person’s land for wages in money or kind or share is
regarded as an agricultural labourer. He or she has no risk in the cultivation, but merely
works on another person's land for wages. An agricultural labourer has no right of lease or
contract on land on which he/she works.
Alpine convertible Bond:
An ACB (Alpine Convertible Bond) is a Foreign Currency Convertible Bond (FCCB) issued by
an Indian company exclusively to the Swiss investors.
Ammortisation:
Payment of a loan in installments by the borrower. It is usually done in an agreed period and
every installment includes a part of the total loan plus the interest.
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Ammortisation is generally used for capital allocation of intangible assets. To amortise a
loan means to “kill it off”.
Andean pact: (Now Andean Community)
Andean pact was a regional pact to establish a common market link among south American
countries. It started originally in 1969.
Andean pact was signed through “Cartagena agreement” in 1969 with its headquarters in
Lima, peru.
At present it has Peru, Equador, Columbia, Bolivia.
The pact had almost collapsed by the mid -1980s due to regional, economic and political
instabilities and was relaunched in 1990 (the original member Chile was dropped and the
new member Venezuela was added to it). Venezuela dropped out in 2006
Animal spirit:
Animal Spirits is a term used by the famous British economist, John Maynard Keynes, to
explain financial and buying decisions in conditions of uncertainty. In Keynes' 1936
publication, The General Theory of Employment, Interest and Money, animal spirits
describes the human emotion that drives consumer confidence.
Adam Smith, another famous British economist, believed that if people pursued their own
economic self-interests in a free market economy, there would be no need for government
intervention, John Maynard Keynes understood that people might be irrationally guided in
pursuing their economic self-interests. In his book, The General Theory of Employment,
Interest and Money, Keynes explained that trying to estimate the yield of various industries,
companies or activities using general knowledge and available insight would realize little to
nothing. Therefore, the only way people can make decisions in such an uncertain
environment is if they are guided by animal spirits.
Antitrust Laws:
Antitrust laws, also referred to as "competition laws," are statutes developed by the various
Governments around the world to protect consumers from predatory business practices by
ensuring that fair competition exists in an open-market economy.
It is a category of the government policy which deals with monopoly.
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Such laws intend to stop uses of ‘market power’ by big companies and at times to prevent
corporate mergers and acquisitions that would strengthen monopoly.
Appreciation:
It shows increase in value and is used in economics in the following two senses:
1) It is an increase in the price of an asset over time, such as price rises in land, factory
building, houses, offices, etc. It is also known as capital appreciation.
2) It is an increase in the value of currency against foreign currency or currencies. It is
market-based if the economy follows the floating-currency exchange-rate system.
Arbitrage:
Arbitrage opportunity is said to arise when an investor is able to earn profits out of the price
differences of the same product in different markets at the same time.
For example, buying and selling any product, financial securities ( bonds) or foreign
currencies in different markets/economies. A foreign currency might be trading at Rs 10 in
Indian market but at an equivalent of Rs 15 in another foreign market. The act of taking
advantage of this situation is called as arbitrage opportunity.
As globalisation is promoting liberalised cross-border movement of goods and services
around the world, arbitrage is prevalent today. To avoid arbitrage the WTO member
countries that is the official countries in the process of globalisation under compulsion to
chalk out homogenous economic policies and a level-playing field at the international level
is emerging.
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ARCs:
Assets Reconstruction Companies(ARCs) are companies which acquire non-performing
assets(NPAs) from banks or financial institutions along with the underlying securities
mortgaged and/ or hypothecated by the borrowers to the lenders.
Asset:
Anything which has a ' money value' owned by an individual or firm is an asset.
It is of three types:
1) Tangible Asset: All physical assets such as land, machinery, building, consumer durables
(refrigerator, car, TV, radio,etc.), etc. (the assets which are in the material form).
2) Intangible Assets: All non-physical/immaterial assets such as brand names, good-will,
credit-worthiness, knowledge, know-how, etc.
3) Financial Assets: All financially valid valuables other than tangibles and intangibles such as
currencies, bank deposits, bonds, securities, shares, etc.
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Assigned revenue:
The term is used to refer to various tax/duty/cess/surcharge/levy etc., proceeds of which
are (traditionally) collected by State Government on behalf of local bodies (the PRIs), and
subsequently adjusted with/assigned to the PRIs.
Examples – entertainment tax, surcharge on stamp duty, local cess on land revenue, lease
on mines and minerals etc.
Autarky:
The idea of self-sufficiency and 'no' imports by a country.
None of the countries of the world has been able to produce all the goods and services
required by its population at competitive prices, however, some tried to live it up at the cost
of inefficiency and comparative poverty.
Difference between self-sufficiency and self-reliance ----
Self Sufficiency - the state of not requiring any aid, support, or interaction for survival. A
totally self-sufficient economy that does not trade with the outside world is called autarky
Self reliance – Self reliance is a positive concept wherein an economy tries to rely on itself
for majority of basic needs but does not try to isolate itself from other economies for trade,
export and import.
The focus of self reliance is on protection against unseen or unexpected situations that may
arise in the future.
Indian economy confused self-reliance with self-sufficiency immediately after
Independence. We wanted to be self-reliant but instead framed our policies in a desire to be
self-sufficient.
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Backwardation:
A term of future trading which means a commodity valued higher today (i.e., spots market)
than the futures (i.e., future market). So the spot price is higher than the forward price in
case of backwardation. When the situation is opposite, it is known as Contango.
NOTE: Backwardation and Contango have been Explained through Videos in derivatives
section of “Finance Theory Course for RBI and NABARD”
Back-to-back loan:
A term of International banking, is an arrangement under which two firms (i.e., companies)
in different economies (i.e., countries) borrow each other's currency and agree to repair
(such loans) at a specified future date.
Each company gets full amount of the loan on the repayment date in their domestic
currency without any risk of losses due to exchange rate fluctuations. It has been developed
as a popular tool of minimising the exchange-rate exposure risk among the multi-national
companies. This is also known as parallel loan.
One example would be an American company wishing to open a European office and a
European company wishing to open an American office. The American company may lend
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the European company $1 million for initial leasing and other costs. This loan is calculated in
U.S. dollars. Simultaneously, the European company loans the American company the
equivalent of $1 million in euros at the current exchange rate to help with their leasing and
other costs. Because both loans are made in the local currencies, there is no currency risk
when the loans are paid back.
Mall
Mallya will take 1 million pounds and transfer to nirav in Bermuda so that nirav can set up
his shop in London.
Nirav modi will take an equivalent loan from Bermuda Bank (equal to 1 million pounds, in
the currency of bermuda) and transfer to Mallya so that he can setup his brewery in
bermuda.
Mallya In London
Mallya wants to loan
money from Bermuda
to setup a “Loser-King-
Fisher”
Modi In Bermuda
Modi wants to loan money
from London to setup a
Jewellery Shop to sell “fake
diamonds”
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Bad debt:
An accounting term to show the loans which are unlikely to be paid back by the borrower as
the borrower has become insolvent/bankrupt. Banks might write off such bad debts against
the profits of the trading as a business cost.
Balanced budget:
The annual financial statement (i.e. the budget) of a government which has the total
expenditures equal to the taxes and other receipts. Most governments, in practice run
unbalanced budgets, i.e., deficit projects or surplus budgets- either the expenditure being
higher or lower than the taxes and the other receipts, respectively.
A deficit budget helps growing or developing economies to spend more than what they earn
to enable capital creation in the economy.
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Balance of payments:
The balance of payments is a statement of all transactions made between entities
in one country and the rest of the world over a defined period of time, such as a quarter or
a year.
The balance of payments (BOP), also known as balance of international payments,
summarizes all transactions that a country's individuals, companies and government bodies
complete with individuals, companies and government bodies outside the country. These
transactions consist of imports and exports of goods, services and capital, as well as transfer
payments such as foreign aid and remittances.
BOP divides transactions into two accounts- current account and capital account.
If a country cannot fund its imports through exports of capital, it must do so by running
down its reserves. This situation is often referred to as a balance of payments deficit.
Balloon payment:
When the final payment of a debt is more than the previous payments, it is balloon
payment.
In mortgage payments, the initial monthly payments are small compared with the final
payment that is required to made towards the end of the loan period.
Basing point price system:
A method of pricing in which a differential (i.e., varying) price is fixed for the same product
for the customers of the different locations-nearer the customer, cheaper the product. This
is done usually to neutralize the transportation cost of the bulky products such as cement,
iron and steel, petroleum, etc.
A pricing system in which the buyer pays a base price plus a set shipping price depending
on the distance from a specific location. The basing point pricing system sets a
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predetermined location, known as the basing point, then adds a transportation charge
depending on how far away the buyer is from that location.
Bellwether stock:
A share which often reflects the state of the whole stock market. The technical analysts,
associated with the stock-market, usually keep a track-record of such shares and go on to
forecast the future stock movements.
BFS (board for financial supervision):
For the purpose of supervision and surveillance of the Indian financial system, a Board of
Financial Supervision (BFS) was set up by the RBI in November 1994. The board supervises
commercial banks, non-banking financial companies (NBFCs), financial Institutions, primary
dealers and the clearing Corporation of India (CCI).
Financial regulation and supervision are the two important functions of the RBI.
Though the RBI is known for its function of monetary policy implementation,
financial regulation and supervision are more effort taking as well as sophisticated
functions. Supervision helps the RBI to continuously check to assess the health and
stability of the financial system. Without effective supervision, the financial
system may face crisis.
Regulation is just stipulating rules in accordance with the laws framed by the
government for the effective control over the financial system. There is the
Banking Regulation Act to regulate banks.
Supervision is different from regulation. Here, the RBI goes to the headquarter of
the bank to check whether the bank’s balance sheet is good. Objective of
supervision is to ensure that banks remains healthy and stable.
Several norms are there for effective supervision. Supervision requires onsite
surveillance of banks. Since the RBI is the regulator for most of the money market
institutions including banks and Non-Banking Financial Institutions, there need a
separate entity. The RBI has constituted a separate unit for supervision and it is
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called Board for Financial Supervision (BFS). The convention in central banking is
that regulation and supervision should not be done by the same entity.
Board for Financial Supervision
The Board for Financial Supervision (BFS) was constituted in November 1994 to
supervise the money market institutions in the country. The BFS has been
constituted as an autonomous body under the RBI.
Board is drawn from the members of the Central Board of the Reserve Bank with
the Governor as Chairman and one of the Deputy Governors as full time Vice-
Chairman. The Board exercises the powers of supervision and inspection under the
RBI Act, 1934 and the Banking Regulation Act, 1949 in relation to the different
sectors of the financial system.
The BFS was initially given the mandate for supervision of commercial banks,
Financial Institutions and NBFCs. Later, urban cooperative banks and primary
dealers were also brought under the purview of the BFS.
periodical on-site inspection of banks that is supplemented by off-site monitoring
and surveillance. Since 1995, on-site inspections are based on CAMELS (Capital
adequacy, asset quality, management, earning, liquidity and systems and controls)
model and aim at achieving the set objectives.
The domestic banks are rated on CAMELS model while foreign banks are rated on
CALCS model (capital adequacy, assets quality, liquidity, compliance and systems).
Black-Scholes:
A formula devised for the pricing of financial derivatives of options-made explosive growth
possible in them by the early 1970s in the US. Myron Scholes and Robert Merton were
awarded Nobel Prize Economics for their part in devising this formula. The co-inventor
Fischer Black had died (1995) by then.
Black-Scholes is a pricing model used to determine the fair price or theoretical value for a
call or a put option based on six variables such as volatility, type of option, underlying stock
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price, time, strike price, and risk-free rate. The quantum of speculation is more in case of
stock market derivatives, and hence proper pricing of options eliminates the opportunity for
any arbitrage. There are two important models for option pricing – Binomial Model and
Black-Scholes Model.
Black scholes model applies to only European options
Bracket creep:
Increasing income due to inflation (via increased dearness allowances, individual income
goes for an increase) pushes individuals into higher tax brackets and leaves them worse off
(as there real income has not increased and their disposable income, i.e., income after tax
payments, falls)- this phenomenon is known as the bracket creep.
The result is an increase in income tax liability but no increase in real purchasing power.
Broad based fund:
This is a fund established or incorporated outside India, which has at least 20 investors with
no single individual investor holding more than 49 per cent of the shares or units of the
fund.
If the broad based fund has institutional investor(s), then it is not necessary for the fund to
have 20 investors. Further, if the broad based fund has an institutional investor who holds
more than 49 percent of the shares or units in the fund, then the institutional investor must
itself be a broad based fund.
In India, the following entities proposing to invest on behalf of broad based funds, are
eligible to be registered as FIIs:
(1).Asset Management Companies (2).Investment Manager/Advisor (3).Institutional
Portfolio Managers (4).Trustee of a Trust and (5).Bank
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