This document provides an overview of marketable securities, including:
- Defining marketable securities as financial instruments that can be easily bought and sold on a stock exchange within a short period of time.
- Features of marketable securities like liquidity, ease of transferability, and lower returns due to lower risk.
- Types of risk associated with securities like default risk, interest rate risk, and inflation risk.
- Classifying marketable securities into marketable equity securities and marketable debt securities.
- Common types of marketable securities like commercial paper, treasury bills, and certificates of deposit.
- Reasons for investing in marketable securities like serving as a cash substitute,
The document discusses the money market in India. It defines the money market and notes that it deals in short-term financial instruments that can be easily converted to cash. Some key aspects of the Indian money market discussed include the various sub-markets (e.g. call money market), instruments (e.g. treasury bills), participants (e.g. commercial banks), and the role of the money market in providing short-term funds and allowing central bank control of liquidity.
Certificates of deposit (CDs) are short-term deposit instruments issued by banks and financial institutions to raise large amounts of money. CDs can be issued with maturities ranging from 7 days to 12 months by banks and 1 to 3 years by financial institutions. They must be purchased in amounts of at least Rs. 1 lakh. Banks and corporations use CDs to mobilize funds when needed, such as providing loans. CDs provide liquidity to banks while offering depositors higher returns than regular fixed deposits. However, the CD market in India has yet to be fully developed due to the lack of a secondary market and low usage despite being available for some time.
The primary market refers to the market for new issues of securities. Companies raise funds directly from investors through primary market mechanisms like initial public offerings, rights issues, and preferential allotments. The primary market allows small and medium businesses to raise money from the public and accelerates capital formation. It consists of new equity capital being issued for the first time. The secondary market refers to the subsequent trading of existing securities between investors. The major difference is that primary market issues are new securities offered by companies, while secondary market involves trading of existing securities between investors.
Fundamental analysis involves analyzing a company's financial statements, management, competitive advantages, and markets to determine the intrinsic value of its stock. It focuses on factors like earnings, production, management, and the overall economy for futures and forex. The key aspects of fundamental analysis include examining economic, financial, qualitative and quantitative factors of a company and its industry to predict stock price movements and evaluate business performance and management. Some tools used are earnings per share, price-earnings ratio, dividend yield, and analysis of statements like the balance sheet and income statement.
Financial instruments are financial contracts between institutional units that include a range of financial assets and liabilities. Some key types of financial instruments are deposits, special drawing rights (SDRs) issued by the IMF, borrowings, loans, shares and other equity, debentures or bonds, other accounts receivable and payable, financial derivatives like options and swaps, letters of guarantee, letters of credit, and financial commitments. Derivatives allow parties to exchange risks and can include options, forwards/futures, and swaps. Loans are evidenced by non-negotiable documents and can be short, medium, or long term. Shares represent ownership rights in enterprises and equity, while debentures or bonds are a form of
This document provides an overview of the Indian money market, including its meaning, key features, instruments, and recent developments. It discusses the structure and components of the Indian money market, such as the call money market, commercial bills market, acceptance market, and treasury bill market. It also outlines some features and deficiencies of the Indian money market, such as the existence of unorganized sectors, absence of integration, and limited instruments. Recent developments that have helped strengthen the Indian money market are also summarized, such as the integration of organized and unorganized sectors, introduction of new instruments, and establishment of organizations to support the market.
Bill discounting allows sellers to receive immediate payment from banks or non-bank financial companies by discounting bills of exchange they receive from buyers. The seller presents the bill of exchange along with supporting documents to the discounting entity and receives immediate payment at a discounted rate. This provides sellers with liquidity before the bill reaches maturity. Common types of bills include demand bills, usance bills, documentary bills, and clean bills. Discounters assess creditworthiness and only discount bills that are backed by genuine trade transactions to avoid fraudulent practices like kite flying.
This document provides an overview of derivative contracts, specifically forward and future contracts. It defines derivatives and describes how forward contracts are bilateral agreements between two parties to buy or sell an asset at a future date for a predetermined price. Future contracts are similar to forwards but are standardized and exchange-traded. The key differences between forwards and futures highlighted are that futures are traded on exchanges, require margin payments, follow daily settlement marked to market, and can be closed prior to delivery, whereas forwards are customized OTC contracts.
The document discusses the money market in India. It defines the money market and notes that it deals in short-term financial instruments that can be easily converted to cash. Some key aspects of the Indian money market discussed include the various sub-markets (e.g. call money market), instruments (e.g. treasury bills), participants (e.g. commercial banks), and the role of the money market in providing short-term funds and allowing central bank control of liquidity.
Certificates of deposit (CDs) are short-term deposit instruments issued by banks and financial institutions to raise large amounts of money. CDs can be issued with maturities ranging from 7 days to 12 months by banks and 1 to 3 years by financial institutions. They must be purchased in amounts of at least Rs. 1 lakh. Banks and corporations use CDs to mobilize funds when needed, such as providing loans. CDs provide liquidity to banks while offering depositors higher returns than regular fixed deposits. However, the CD market in India has yet to be fully developed due to the lack of a secondary market and low usage despite being available for some time.
The primary market refers to the market for new issues of securities. Companies raise funds directly from investors through primary market mechanisms like initial public offerings, rights issues, and preferential allotments. The primary market allows small and medium businesses to raise money from the public and accelerates capital formation. It consists of new equity capital being issued for the first time. The secondary market refers to the subsequent trading of existing securities between investors. The major difference is that primary market issues are new securities offered by companies, while secondary market involves trading of existing securities between investors.
Fundamental analysis involves analyzing a company's financial statements, management, competitive advantages, and markets to determine the intrinsic value of its stock. It focuses on factors like earnings, production, management, and the overall economy for futures and forex. The key aspects of fundamental analysis include examining economic, financial, qualitative and quantitative factors of a company and its industry to predict stock price movements and evaluate business performance and management. Some tools used are earnings per share, price-earnings ratio, dividend yield, and analysis of statements like the balance sheet and income statement.
Financial instruments are financial contracts between institutional units that include a range of financial assets and liabilities. Some key types of financial instruments are deposits, special drawing rights (SDRs) issued by the IMF, borrowings, loans, shares and other equity, debentures or bonds, other accounts receivable and payable, financial derivatives like options and swaps, letters of guarantee, letters of credit, and financial commitments. Derivatives allow parties to exchange risks and can include options, forwards/futures, and swaps. Loans are evidenced by non-negotiable documents and can be short, medium, or long term. Shares represent ownership rights in enterprises and equity, while debentures or bonds are a form of
This document provides an overview of the Indian money market, including its meaning, key features, instruments, and recent developments. It discusses the structure and components of the Indian money market, such as the call money market, commercial bills market, acceptance market, and treasury bill market. It also outlines some features and deficiencies of the Indian money market, such as the existence of unorganized sectors, absence of integration, and limited instruments. Recent developments that have helped strengthen the Indian money market are also summarized, such as the integration of organized and unorganized sectors, introduction of new instruments, and establishment of organizations to support the market.
Bill discounting allows sellers to receive immediate payment from banks or non-bank financial companies by discounting bills of exchange they receive from buyers. The seller presents the bill of exchange along with supporting documents to the discounting entity and receives immediate payment at a discounted rate. This provides sellers with liquidity before the bill reaches maturity. Common types of bills include demand bills, usance bills, documentary bills, and clean bills. Discounters assess creditworthiness and only discount bills that are backed by genuine trade transactions to avoid fraudulent practices like kite flying.
This document provides an overview of derivative contracts, specifically forward and future contracts. It defines derivatives and describes how forward contracts are bilateral agreements between two parties to buy or sell an asset at a future date for a predetermined price. Future contracts are similar to forwards but are standardized and exchange-traded. The key differences between forwards and futures highlighted are that futures are traded on exchanges, require margin payments, follow daily settlement marked to market, and can be closed prior to delivery, whereas forwards are customized OTC contracts.
Commercial paper (CP) is an unsecured, short-term debt instrument issued by corporations to meet short-term liabilities. CP was introduced in India in 1990 to provide highly rated corporations an alternative to bank borrowing. Only reputable corporations with good credit ratings can issue CPs to borrow at lower interest rates than banks and save on financing costs. CPs can be issued for periods between 15 days to one year, making them suitable for meeting working capital or current asset needs.
This document provides an overview of the money market and capital market in India. It discusses the history and development of the money market in India from 1935 when the RBI was established through various committees and reforms. It describes key segments of the money market like the call money market, certificate of deposits, commercial paper market. It also compares organized and unorganized money markets. Similarly, for capital markets it discusses the regulator SEBI, functions, instruments, structure comparing primary and secondary markets and methods to float new issues.
This document discusses the capital market and secondary market in India. It defines the key terms like money market, capital market, primary market and secondary market. The secondary market refers to the market where securities are traded after the initial public offering. The document also describes the role of brokers and sub-brokers in trading, the trading process, settlement process, brokerage and other charges involved in trading. It provides details on various concepts related to stock exchanges like corporatization, demutualization and obligations of brokers.
Financial markets facilitate the buying and selling of financial instruments between savers and investors. They act as intermediaries that allow households to deposit surplus funds with banks or purchase securities from businesses, and allow businesses to access funds from households. Financial markets have several key functions, including mobilizing savings, facilitating price discovery, providing liquidity to financial assets, and reducing transaction costs. The major financial markets in India are the money market, stock market, and bond market. The money market deals in short-term debt instruments with maturities of up to one year and includes sub-markets for call money, treasury bills, commercial paper, and certificates of deposit.
Government securities are debt instruments issued by the government to raise funds. They include treasury bills and bonds. Government securities are considered low-risk as they are backed by the government's taxing power. They are issued to fund government expenditures and control the money supply. Types of government securities include dated securities, zero-coupon bonds, floating rate bonds, and bonds with call/put options. While government securities offer assured returns, their returns are generally lower than other securities and investors may lose value if interest rates rise.
A portfolio is a combination of various investment products like bonds, shares, securities, and mutual funds. Portfolio revision involves changing the mix of securities in an existing portfolio by adding or removing assets. This is done to maximize returns and minimize risks. Reasons for portfolio revision include having additional funds to invest, changes in financial goals, or market fluctuations. There are active and passive portfolio revision strategies, with active strategies involving more frequent changes and passive only changing according to predetermined rules. The roles of a portfolio manager include designing customized investment plans, keeping up to date on the market, guiding clients impartially, and regularly communicating with clients.
Presentation on "Capital Market"
1.definition and characteristics
2.function and players
3.importance/role and types
4.factor and structure
5.reforms and development
This document provides an overview of swaps, including:
- A history of swaps beginning with the first interest rate swap in 1981 and growth to $250 trillion by 2006.
- Definitions and key characteristics of swaps, which involve the exchange of cash flows between two counterparties according to a pre-arranged formula.
- The main types of swaps are interest rate swaps, currency swaps, equity swaps, credit default swaps, and commodity swaps. Interest rate swaps and currency swaps make up the largest portion of the swap market.
Forfeiting is the process of purchasing a company's export receivables at a discount for cash. It involves an exporter selling its receivables from export sales to a forfeiting company, which then receives payment from the importer. This converts deferred export payments into immediate cash for the exporter, while absorbing the risks normally borne by exporters such as political and currency risk. Forfeiting provides exporters with liquidity and freedoms them from credit administration and risk, while absorbing the importer's risk for the forfeiting company in exchange for a discount on the receivables.
This document provides information about a student group project on capital market instruments. It includes the names and roll numbers of the group members, a table of contents for the project, and sections describing different capital market instruments like equity shares, preference shares, debentures, and bonds. It also discusses the differences between equity and debt securities and concludes that the capital market plays an important role in economic development.
Working capital management — factors determining working capital — estimation of working capital —inventory management techniques — receivables management — management of cash and marketable securities — techniques of cash management — committees on working capital and their findings and recommendations.
The document discusses various aspects of the new issue market in India including initial public offerings (IPO) where firms issue stock to the public for the first time, and seasoned equity offerings (SEO) where already public firms issue additional stock. It covers the key functions of origination, underwriting, and distribution in new stock issues. It also discusses the roles of various intermediaries that facilitate new issues such as merchant bankers, brokers, and underwriters.
Derivatives - Basics of Derivatives contract covered in this pptSundar B N
Derivatives - Basics of Derivatives including forward, futures, swap and options contracts which covers HISTORY OF DERIVATIVES, CHARACTERISTICS OF DERIVATIVES , FEATURES OF DERIVATIVES, FUNCTIONS OF DERIVATIVES MARKET, USES OF DERIVATIVES, DIFFERENCE BETWEEN SHARES AND DERIVATIVES SHARES DERIVATIVES, DEFINITION OF UNDERLYING ASSET, DERIVATIVES ADVANTAGES AND DISADVANTAGES, PARTICIPANTS/ TRADERS IN DERIVATIVES MARKET, SPECULATORS, ARBITRAGEURS, HEDGER
Subscribe to Vision Academy for Video assistance
https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
This document defines and describes various types of security and non-security marketable and non-marketable financial assets. It discusses equity shares, preference shares, bonds, debentures, convertible securities, hybrid securities, derivatives, and various money market instruments. It also covers non-security assets such as fixed deposits, gilt-edged securities, and post office savings schemes.
This document provides an overview of various financial services. It discusses banking services, insurance services, investment management services like mutual funds and portfolio management, and capital market services. It describes the key entities that offer these services like banks, insurance companies, asset management companies, stock brokers, etc. It also outlines the major types of products and services offered within each category of financial services.
The document discusses the macro economic environment and financial markets in India. It describes the money market and its components like call money, treasury bills, commercial bills, and commercial paper. It also discusses the organized and unorganized segments of the money market. The capital market is described along with the gilt-edged market and corporate securities market. Reforms to strengthen the capital market are also summarized.
Financial restructuring is the process of rearranging a company's financial structure to avoid liquidation. It is necessary when companies face issues like misappropriated funds, obsolete technology, inefficient resource use, or external factors causing losses. Financial restructuring can involve reducing debt, reorganizing equity capital through share issuances or buybacks, or altering share capital through consolidation, subdivision, or conversion to stock. The goals are to make a company's capitalization balanced and improve its competitiveness and efficiency. Court approval and shareholder approval through special resolution are required for financial restructuring plans involving reductions to share capital.
Difference between systematic and unsystematic riskSOJIBSABBIR
Systematic risk, also known as market risk, is uncertainty inherent to the entire market and consists of day-to-day stock price fluctuations. It includes interest, market, and inflation risks and is uncontrollable, arising from macroeconomic factors that affect many securities. Unsystematic risk is uncertainty from a specific company or industry and includes business and financial risks, which can be reduced through diversification. It is controllable and arises from micro-economic factors affecting individual securities.
The document provides information about various aspects of financial markets in India, including money markets, capital markets, and the instruments that trade within them. It discusses short-term money market instruments like treasury bills, commercial paper, certificates of deposit, and various types of markets like the call money market, commercial bill market, gilt-edged security markets, and capital markets. It also covers the key features and functions of instruments like treasury bills, certificates of deposit, and how the commercial bill market works. Overall, the document offers a comprehensive overview of the different segments of India's financial system and the short-term and long-term debt instruments that are commonly traded within each.
Commercial paper (CP) is an unsecured, short-term debt instrument issued by corporations to meet short-term liabilities. CP was introduced in India in 1990 to provide highly rated corporations an alternative to bank borrowing. Only reputable corporations with good credit ratings can issue CPs to borrow at lower interest rates than banks and save on financing costs. CPs can be issued for periods between 15 days to one year, making them suitable for meeting working capital or current asset needs.
This document provides an overview of the money market and capital market in India. It discusses the history and development of the money market in India from 1935 when the RBI was established through various committees and reforms. It describes key segments of the money market like the call money market, certificate of deposits, commercial paper market. It also compares organized and unorganized money markets. Similarly, for capital markets it discusses the regulator SEBI, functions, instruments, structure comparing primary and secondary markets and methods to float new issues.
This document discusses the capital market and secondary market in India. It defines the key terms like money market, capital market, primary market and secondary market. The secondary market refers to the market where securities are traded after the initial public offering. The document also describes the role of brokers and sub-brokers in trading, the trading process, settlement process, brokerage and other charges involved in trading. It provides details on various concepts related to stock exchanges like corporatization, demutualization and obligations of brokers.
Financial markets facilitate the buying and selling of financial instruments between savers and investors. They act as intermediaries that allow households to deposit surplus funds with banks or purchase securities from businesses, and allow businesses to access funds from households. Financial markets have several key functions, including mobilizing savings, facilitating price discovery, providing liquidity to financial assets, and reducing transaction costs. The major financial markets in India are the money market, stock market, and bond market. The money market deals in short-term debt instruments with maturities of up to one year and includes sub-markets for call money, treasury bills, commercial paper, and certificates of deposit.
Government securities are debt instruments issued by the government to raise funds. They include treasury bills and bonds. Government securities are considered low-risk as they are backed by the government's taxing power. They are issued to fund government expenditures and control the money supply. Types of government securities include dated securities, zero-coupon bonds, floating rate bonds, and bonds with call/put options. While government securities offer assured returns, their returns are generally lower than other securities and investors may lose value if interest rates rise.
A portfolio is a combination of various investment products like bonds, shares, securities, and mutual funds. Portfolio revision involves changing the mix of securities in an existing portfolio by adding or removing assets. This is done to maximize returns and minimize risks. Reasons for portfolio revision include having additional funds to invest, changes in financial goals, or market fluctuations. There are active and passive portfolio revision strategies, with active strategies involving more frequent changes and passive only changing according to predetermined rules. The roles of a portfolio manager include designing customized investment plans, keeping up to date on the market, guiding clients impartially, and regularly communicating with clients.
Presentation on "Capital Market"
1.definition and characteristics
2.function and players
3.importance/role and types
4.factor and structure
5.reforms and development
This document provides an overview of swaps, including:
- A history of swaps beginning with the first interest rate swap in 1981 and growth to $250 trillion by 2006.
- Definitions and key characteristics of swaps, which involve the exchange of cash flows between two counterparties according to a pre-arranged formula.
- The main types of swaps are interest rate swaps, currency swaps, equity swaps, credit default swaps, and commodity swaps. Interest rate swaps and currency swaps make up the largest portion of the swap market.
Forfeiting is the process of purchasing a company's export receivables at a discount for cash. It involves an exporter selling its receivables from export sales to a forfeiting company, which then receives payment from the importer. This converts deferred export payments into immediate cash for the exporter, while absorbing the risks normally borne by exporters such as political and currency risk. Forfeiting provides exporters with liquidity and freedoms them from credit administration and risk, while absorbing the importer's risk for the forfeiting company in exchange for a discount on the receivables.
This document provides information about a student group project on capital market instruments. It includes the names and roll numbers of the group members, a table of contents for the project, and sections describing different capital market instruments like equity shares, preference shares, debentures, and bonds. It also discusses the differences between equity and debt securities and concludes that the capital market plays an important role in economic development.
Working capital management — factors determining working capital — estimation of working capital —inventory management techniques — receivables management — management of cash and marketable securities — techniques of cash management — committees on working capital and their findings and recommendations.
The document discusses various aspects of the new issue market in India including initial public offerings (IPO) where firms issue stock to the public for the first time, and seasoned equity offerings (SEO) where already public firms issue additional stock. It covers the key functions of origination, underwriting, and distribution in new stock issues. It also discusses the roles of various intermediaries that facilitate new issues such as merchant bankers, brokers, and underwriters.
Derivatives - Basics of Derivatives contract covered in this pptSundar B N
Derivatives - Basics of Derivatives including forward, futures, swap and options contracts which covers HISTORY OF DERIVATIVES, CHARACTERISTICS OF DERIVATIVES , FEATURES OF DERIVATIVES, FUNCTIONS OF DERIVATIVES MARKET, USES OF DERIVATIVES, DIFFERENCE BETWEEN SHARES AND DERIVATIVES SHARES DERIVATIVES, DEFINITION OF UNDERLYING ASSET, DERIVATIVES ADVANTAGES AND DISADVANTAGES, PARTICIPANTS/ TRADERS IN DERIVATIVES MARKET, SPECULATORS, ARBITRAGEURS, HEDGER
Subscribe to Vision Academy for Video assistance
https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
This document defines and describes various types of security and non-security marketable and non-marketable financial assets. It discusses equity shares, preference shares, bonds, debentures, convertible securities, hybrid securities, derivatives, and various money market instruments. It also covers non-security assets such as fixed deposits, gilt-edged securities, and post office savings schemes.
This document provides an overview of various financial services. It discusses banking services, insurance services, investment management services like mutual funds and portfolio management, and capital market services. It describes the key entities that offer these services like banks, insurance companies, asset management companies, stock brokers, etc. It also outlines the major types of products and services offered within each category of financial services.
The document discusses the macro economic environment and financial markets in India. It describes the money market and its components like call money, treasury bills, commercial bills, and commercial paper. It also discusses the organized and unorganized segments of the money market. The capital market is described along with the gilt-edged market and corporate securities market. Reforms to strengthen the capital market are also summarized.
Financial restructuring is the process of rearranging a company's financial structure to avoid liquidation. It is necessary when companies face issues like misappropriated funds, obsolete technology, inefficient resource use, or external factors causing losses. Financial restructuring can involve reducing debt, reorganizing equity capital through share issuances or buybacks, or altering share capital through consolidation, subdivision, or conversion to stock. The goals are to make a company's capitalization balanced and improve its competitiveness and efficiency. Court approval and shareholder approval through special resolution are required for financial restructuring plans involving reductions to share capital.
Difference between systematic and unsystematic riskSOJIBSABBIR
Systematic risk, also known as market risk, is uncertainty inherent to the entire market and consists of day-to-day stock price fluctuations. It includes interest, market, and inflation risks and is uncontrollable, arising from macroeconomic factors that affect many securities. Unsystematic risk is uncertainty from a specific company or industry and includes business and financial risks, which can be reduced through diversification. It is controllable and arises from micro-economic factors affecting individual securities.
The document provides information about various aspects of financial markets in India, including money markets, capital markets, and the instruments that trade within them. It discusses short-term money market instruments like treasury bills, commercial paper, certificates of deposit, and various types of markets like the call money market, commercial bill market, gilt-edged security markets, and capital markets. It also covers the key features and functions of instruments like treasury bills, certificates of deposit, and how the commercial bill market works. Overall, the document offers a comprehensive overview of the different segments of India's financial system and the short-term and long-term debt instruments that are commonly traded within each.
The document provides information on various types of investments and financial markets. It discusses initial public offerings (IPOs) as well as the roles of intermediaries in the primary market. Specifically, it notes that an IPO allows a company to raise funds by selling shares to the public for the first time. A lead manager helps guide companies through the IPO process by conducting due diligence, drafting offering documents, and coordinating post-issue activities.
The document provides an overview of money markets, including key definitions and concepts. Money markets are a segment of the financial market where short-term, highly liquid financial instruments are traded. They allow participants to borrow and lend for short periods ranging from a few days to under a year. Common money market instruments include treasury bills, commercial paper, certificates of deposit, and banker's acceptances, which are all very short-term, safe investments. Money markets serve important functions like financing trade and industry while also providing investment opportunities.
Money Market refers to the market for short-term financial instruments like treasury bills, commercial paper, and certificates of deposit that are close substitutes for money. It provides short-term funding for borrowers and liquidity for lenders. Treasury bills are a key money market instrument issued by the government on a discount basis with maturities of 91 days, 182 days, and 364 days. They are considered very low risk but also offer very low returns given their short duration. The money market plays an important role in providing short-term funding to banks and corporations while allowing central banks to regulate liquidity in the financial system.
Government securities are tradable debt instruments issued by the Central Government and State Governments to finance fiscal deficits and public development programs. They are issued by the Reserve Bank of India on behalf of the government. Government securities include Treasury bills and State Development Loans. They are needed to finance government functions like infrastructure creation and maintenance. Government securities are issued at face value, carry no default risk due to sovereign guarantee, offer high liquidity, and provide interest payments semi-annually. Major participants in the government securities market include banks, financial institutions, companies, mutual funds, and individuals.
The stock market is a place where shares of companies are traded either through exchanges or over-the-counter. Owning a share provides a slice of ownership in the company and entitles the holder to a portion of the company's profits (dividends) and potential capital gains from share price appreciation. The forex market is the largest market globally with an average daily trading volume exceeding $1.9 trillion. It allows trading of currencies and provides high leverage of up to 1:400. Commodities and stock futures can be traded in India through major brokerage houses, with futures offering very high leverage relative to stock markets. Options provide the buyer the right but not obligation to buy or sell a security at a predetermined
The document discusses various investment options including short-term options like savings accounts, money market funds, and bank fixed deposits as well as long-term options like post office savings, public provident fund, company fixed deposits, bonds, and mutual funds. It also discusses stock exchanges, defining them as bodies that assist and regulate buying and selling of securities. It defines key terms related to investments in the stock market like equity, debt instruments, derivatives, indexes, depositories, and dematerialization.
The document discusses various aspects of financial markets. It defines a financial market as a mechanism that allows people to buy and sell financial securities and commodities. It then describes different types of financial markets including the money market, capital market, primary market, and secondary market. The document focuses on instruments and importance of the money market, discussing treasury bills, commercial paper, certificates of deposits, repurchase agreements, and banker's acceptances. It also covers capital markets, their importance, and instruments like equity shares, preference shares, bonds, and debentures.
The document discusses various aspects of financial markets, including money markets and capital markets. It defines a financial market as a mechanism that allows people to buy and sell financial securities and commodities. Money markets deal in short-term lending of less than 1 year, for safe and liquid assets. Capital markets facilitate long-term borrowing and lending for investments. Some common money market instruments discussed are treasury bills, commercial paper, certificates of deposits, repurchase agreements, and banker's acceptances. Capital market instruments include equity shares, preference shares, bonds, and debentures.
This document provides an introduction to investments, including definitions, objectives of investment, types of investments, and characteristics of investments. It defines investment as committing funds with the goal of deriving future income or appreciation. The main objectives are future consumption, hedging against inflation, and compensation for sacrifice, inflation, and risk. Investments are categorized as growth investments like shares and property, which aim for capital appreciation, and defensive investments like cash and fixed interest, which prioritize income stability and safety of principal.
This document discusses fixed income instruments and their behaviors. It defines fixed income as any investment where the borrower pays a fixed amount on a fixed schedule. Fixed income instruments include bonds, treasury bills, commercial papers, bankers' acceptances, and certificates of deposit. Bonds can be government bonds or corporate bonds. Treasury bills are short term debt instruments issued by the government. Commercial papers and bankers' acceptances are also short term debt instruments issued by corporations. Certificates of deposit are time deposits held at a bank. Fixed income instruments provide regular income to investors and are generally lower risk compared to variable income securities.
This document discusses different types of investments and provides an overview of mutual funds. It defines mutual funds as a trust that pools savings from investors with a common financial goal and invests it in stocks, bonds, and other securities. The document then discusses different types of mutual funds categorized by maturity period (open-ended or close-ended), investment objective (growth, income, balanced, etc.), and sector focus. It also outlines key terms related to mutual funds like NAV, load, portfolio, and expense ratio. Finally, it discusses the growth of the mutual fund industry in India and options for investing in mutual funds online or offline.
This document discusses mutual funds and different types of investments. It begins by defining mutual funds and their structure in India. It then discusses different types of mutual funds categorized by maturity period (open-ended or close-ended) and investment objective (growth, income, balanced, etc.). The document also covers basic terms related to mutual funds, trends in the Indian mutual fund industry, and how to invest in mutual funds online or offline.
Investment management is a generic term that most commonly refers to the buying and selling of investments within a portfolio. Investment management can also include banking and budgeting duties, as well as taxes. The term most often refers to portfolio management and the trading of securities to achieve a specific investment objective.
Investment management – also referred to as money management, portfolio management or private banking – covers the professional management of different securities and assets, such as bonds, shares, real estate and other securities. Proper investment management aims to meet particular investment goals for the benefit of the investors. These investors may be individual investors – referred to as private investors – who have built investment contracts with fund managers, or institutional investors who may be pension fund corporations, governments, educational establishments or insurance companies.
Investment management services provide asset allocation, financial statement analysis, stock selection, monitoring of existing investments and plan implementation.
The document discusses financial markets and money markets. It defines a financial market as a mechanism for buying and selling financial securities and commodities. It notes that money markets deal in short-term lending of less than 1 year for instruments like treasury bills, commercial paper, certificates of deposits, repurchase agreements, and bankers acceptances. Capital markets are for longer term borrowing and lending through instruments like stocks, bonds, debentures, and preference shares.
This document provides an overview and comparison of the money markets in South Africa and India. It defines what money markets are and discusses the objectives, participants, instruments, and factors that influence money markets. Regarding South Africa specifically, it describes the institutions, instruments traded, trading systems, and regulation of the South African money market. For India, it notes the maturity periods, regulations, and types of instruments in the Indian money market. In comparing the two markets, it finds they have similar maturity periods, regulations, permitted instruments, and moved from paper-based to computerized trading.
The financial system in India has seen significant changes since independence, facilitating faster economic development. The system links savers and investors through various financial institutions and markets. It provides necessary financial inputs for production through intermediation of funds. The major components of the financial system are banking institutions, non-banking financial institutions, financial markets, and financial instruments. Financial markets include money markets for short-term funds and capital markets for long-term funds. Money markets deal in short-term debt instruments like treasury bills, commercial paper, certificates of deposit, and promissory notes. Capital markets facilitate resource mobilization through primary and secondary markets.
The money market is a place where large institutions and governments manage short-term cash needs through very short term debt securities maturing in less than one year. It specializes in safe, liquid instruments like treasury bills, certificates of deposit, commercial paper, and repurchase agreements. While offering lower returns than stocks, these conservative money market securities provide more safety. Individual investors can access the money market through money market mutual funds.
At Techbox Square, in Singapore, we're not just creative web designers and developers, we're the driving force behind your brand identity. Contact us today.
3 Simple Steps To Buy Verified Payoneer Account In 2024SEOSMMEARTH
Buy Verified Payoneer Account: Quick and Secure Way to Receive Payments
Buy Verified Payoneer Account With 100% secure documents, [ USA, UK, CA ]. Are you looking for a reliable and safe way to receive payments online? Then you need buy verified Payoneer account ! Payoneer is a global payment platform that allows businesses and individuals to send and receive money in over 200 countries.
If You Want To More Information just Contact Now:
Skype: SEOSMMEARTH
Telegram: @seosmmearth
Gmail: seosmmearth@gmail.com
Part 2 Deep Dive: Navigating the 2024 Slowdownjeffkluth1
Introduction
The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
The 10 Most Influential Leaders Guiding Corporate Evolution, 2024.pdfthesiliconleaders
In the recent edition, The 10 Most Influential Leaders Guiding Corporate Evolution, 2024, The Silicon Leaders magazine gladly features Dejan Štancer, President of the Global Chamber of Business Leaders (GCBL), along with other leaders.
Top mailing list providers in the USA.pptxJeremyPeirce1
Discover the top mailing list providers in the USA, offering targeted lists, segmentation, and analytics to optimize your marketing campaigns and drive engagement.
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
Taurus Zodiac Sign: Unveiling the Traits, Dates, and Horoscope Insights of th...my Pandit
Dive into the steadfast world of the Taurus Zodiac Sign. Discover the grounded, stable, and logical nature of Taurus individuals, and explore their key personality traits, important dates, and horoscope insights. Learn how the determination and patience of the Taurus sign make them the rock-steady achievers and anchors of the zodiac.
Storytelling is an incredibly valuable tool to share data and information. To get the most impact from stories there are a number of key ingredients. These are based on science and human nature. Using these elements in a story you can deliver information impactfully, ensure action and drive change.
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
Building Your Employer Brand with Social MediaLuanWise
Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
Discover timeless style with the 2022 Vintage Roman Numerals Men's Ring. Crafted from premium stainless steel, this 6mm wide ring embodies elegance and durability. Perfect as a gift, it seamlessly blends classic Roman numeral detailing with modern sophistication, making it an ideal accessory for any occasion.
https://rb.gy/usj1a2
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.AnnySerafinaLove
This letter, written by Kellen Harkins, Course Director at Full Sail University, commends Anny Love's exemplary performance in the Video Sharing Platforms class. It highlights her dedication, willingness to challenge herself, and exceptional skills in production, editing, and marketing across various video platforms like YouTube, TikTok, and Instagram.
5. WHAT ARE MARKETABLES SECURTIES
FEATURES OF MARKETABLE SECURTIES
TYPES OF RISK ASSOCIATED WITH ANY SECURITIES
CLASSIFICATION OF MARKETABLE SECURITIES
TYPES OF MARKETABLE SECURITIES
WHY INVEST IN MARKETABLE SECURITIES
METHODS OF MARKETABLE SECURITIES
CONCLUSION
CONTENTS
6. “Marketable securities are the financial instrument than can be easily bought
and sold on a stock exchange within a short period of time.”
In order to understand the above definition, we first need to
understand one important term in the above definition – “financial
instruments”.
Financials instrument represents the legal obligation to pay or receive
any monetary value. Financial instruments are the assets than can be
exchanged or traded.
All marketable securities are financial instruments but all financial
instruments are not marketable securities.
WHAT ARE MARKETABEL SECURITIES
7. There are many features of Marketable Securities these are discuss
below:
1) Marketable securities are highly liquid
Marketable securities are highly liquid and can be easily converted
into cash within short time and at a reasonable price.
What amounts to short time has not be defined anywhere but as per
the conventions and generally accepted principles, this duration
should be less than one year.
Some of examples of instruments who exhibit the following features
and hence classified as marketable securities are commercial paper,
treasury bills, bills receivables and other short term instruments.
FEATURES OF MARKETABLE SECURTIES
8. 2) MARKETABLE SECURITIES ARE EASILY TRANSFERABLE
In order to be highly liquid, marketable securities should be easily
transferable.
Highly liquid and easily transferable features of marketable
securities are complementary to one other.
Marketable securities are instruments than can be easily
transferable on a stock exchange or otherwise.
9. 3) LOWER RETURN ON MARKETABLE SECURITIES
Return on any security is directly proportional to risk
associated with it.
Higher the risk, higher the return.
Since marketable securities are highly liquid and easily
transferable, inflation* and default risk* associated with them
are very low in comparison to other types of securities.
Investor has to make a trade-off between risk and return when
choosing marketable securities.
11. Default risk: Default risk is the probability that the issuer or
borrower will not be able to make payments on their debt
obligations on the due date.
Interest rate risk: Interest rate risk is the risk associated with
the fixed return instrument like bonds, debentures whose
value decrease on account of rise in interest rate.
Inflation risk: Inflation risk affects all types of securities.
Though it affects every economy, it’s effect is seen more in
high inflationary economy where price level of commodities
rises drastically every year. Rise in price level reduces the
value of money and the decreased value of money results in
decreased return on assets.
TYPES OF RISK ASSOCIATED WITH ANY
SECURITIES
12. Marketable securities can be classified under two categories:
1) MARKETABLE EQUITY SECURITIES
2) MARKETABLE DEBT SECURITIES
CLASSIFICATION OF MARKETABLE
SECURITIES
13. Marketable equity securities are equity instruments that are trade
on stock exchanges
Marketable equity security can be both Common Stock and
Preferred Stock
If the Stock is expected to be liquidated within one year the holding
company will list as a Current Assets
If the company expects to hold the stock for more than one year it
will listed as a non current Assets
All marketable equity securities all current and non current are
listed at the lower value of cost or market
1. Marketable equity securities
14. Marketable debt securities are those debt securities that are traded
in bond market
Common types of debt securities are Government bonds,
Commercial papers and etc.
Marketable debt securities are held as short term investments and
are expected to be sold within one year
If a debt securities is expected to be held for more than one year it
should be classified as a long term investment on the companies
Balance Sheet
2. Marketable debt securities
16. There are different types of Marketable Securities. Some of the
common marketable securities available in the market are discussed
here
1) Commercial Paper
Commercial papers are short term debt instruments with a
maturity of not more than 270 days.
They are unsecured debt i.e. they are not backed by collateral or, in
other words, borrower does not guarantee payment.
They are used for short term financing i.e. used for purchase of
inventory, current assets and meeting short term liabilities.
Since they are not secured, they are issued by large institutions and
are purchased by big and wealthy corporates.
Types of Marketable Securities
17. 2) BILLS OF EXCHANGE
A banker acceptance is the amount borrowed by the borrower,
promised to be paid in future, which is backed and guaranteed
by the bank.
Difference between commercial paper and bills of exchange is
that bills of exchange unlike commercial paper is secured debt.
Like commercial paper, it is also a short term finance instrument
which is generally used for purchased of inventory, current assets
and meeting other short term liabilities.
Bankers acceptances specifies the amount of money, the due date
and the name of the person to whom payment is to be done.
18. 3) TREASURY BILLS (T BILLS)
These T-bills are short term securities with maturity of less than one
year.
In market, one can find different categories of T-bills with three-
month, six-month and one-year maturity.
One of the feature of T-Bills which makes them popular with
common investors is that they are not issued at large
denominations.
Like commercial paper, they are issued at a discount and investors
gets a face value on maturity.
19. Government issues a T-Bill Face Value Rs 10,000; maturity six
month at Rs 9,800.
SOLUTION –
In this case, Investor will have to shelve Rs 9,800 for purchasing
the T-Bill. At the end of six months, Investor can sell back the T-
bill to Government at Rs 10,000. Thus earning himself
Rs 200, which is a discount rate or the interest rate earned by
holding the T-bill. Hence it is said that the T-bills are always
issued at a discount.
T- BILL EXAMPLE
20. 4) CERTIFICATES OF DEPOSITS
These are similar to savings accounts.
It is issued in lieu of the money deposited at a bank for a
specified period.
These are negotiable instruments and hence can be easily
transferable.
Maturity period of certificate of deposits varies from seven
days to one year in case of commercial banks, and from one
year to three years, in case of financial institutions
22. Almost every Company will invest the certain amount of funds
in marketable securities. Broad reasons for investing in
marketable security as follows -:
1) Substitute for hard cash
Marketable securities are great substitute for cash and bank
balances
Idle cash does not grow since no return is received by holding
it.
Marketable securities not only offer adequate return but also
retains the benefits associated with holding money, since they
are highly liquid and easily transferable.
Why invest in Marketable Securities?
23. 2) Repayment of short term liabilities
– Every company has liabilities which are further bifurcated into
short term and long term liabilities
Long term liabilities are repaid over longer time period, which
generally is more than one year. Whereas short term liabilities
are to be paid within one year
Bonus expense, tax expense and etc. are some of the examples of
the short term liability
Marketable securities are the best mode of payment of short term
liabilities since they are highly liquid and in the meantime also
provide the company additional income in form of interests and
dividends.
24. 3) Regulatory Requirement
In order to raise funds and loans from financial institutions,
corporates have to follow certain guidelines and rules known as
covenants which safeguards the interest of lenders
Covenants are often in form of ratios which the borrower has to
maintain throughout the loan period. These ratios mostly deal
with liquidity and long term solvency health of companies
Maintenance of marketable securities helps in meeting out
solvency ratios since most of the marketable securities are
considered as current assets
25. (1). Interest and dividend revenue
Marketable securities earn dividend or interest revenue for the
company. If a company holds a large sum of cash and does not invest
it anywhere, it will generate nothing for the company.
(2). Increase in market value:
Marketable securities also generate a return when their market
value increases
Advantages of marketable securities:
26. (3). Liquidity
Unlike long term investments, purchase of marketable
securities does not impact the liquidity position of the business.
They can be quickly sold in the secondary financial markets to
meet immediate cash needs of the company.
Continue…….
28. There are many methods of marketing securities some are discuss
below
Over the counter placement
Right Issue
Bonus Share
Offer for Sale
…..
Methods of Marketing
Securities
29. It permits smaller companies to raise funds. A company may place its
issue through OTC Exchange.
The procedure involved under this method is that the company
wishing to raise funds through OTC Exchange appoints a member of
OTCEI as a sponsor. The sponsor appraises the project and values the
share of the company.
The sponsor ensures the success of the issue even if it has to subscribe
to all the shares by itself.
Over the Counter Placement
30. It is an invitation to the existing shareholders to subscribe for
further shares to be issued by a company.
A right simply means an option to buy certain privileged price
within a certain specific period.
Section 81 of the Companies Act 1956 has provided a pre emotive to
the existing shareholders of a company to purchase shares in
further issues of the company.
Right Issue
31. A company having free reserves built out of genuine profits or
share premium collected in cash may issue bonus shares to its
existing shareholders
The companies which have huge accumulated profits and reserves
but not so good liquidity position prefer to capitalize profits by the
issue of bonus shares.
Bonus issue does not bring in fresh capital for the company, it only
enables a company to restructure its capital.
Bonus Share
32. Adopted in case of large issue of companies.
The issuing company sells or agrees to sell the securities for sale to
certain issue houses or the specialized financial institutions at a
fixed price.
The issue house or the financial institutions then issue
advertisements making offer for sale of such securities at a price
higher than the price at which they obtain the securities.
Offer for Sale
33. All the above features and advantages of marketable securities
have made them quite popular means of financial instrument.
Almost every company holds some amount of marketable
securities. The specific reason for holding these depend greatly on
the solvency and financial condition of the company.
Despite many advantages, there are some limitations like low
return, default risk and inflation risk associated with marketable
securities.
Marketable securities are held by the company for trading purpose
or liquidity purpose.
Generally, these are held up to their maturity period, but company
may sell them prior to their stated maturities for strategic reasons
including, but not limited to, anticipation of credit deterioration and
duration management.
Conclusion