Merits & demerits of types of investment
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The above presentation tells you about the various forms of investment and their advantages and disadvantages
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Derivatives
This document provides an introduction to derivatives, including:
- Derivatives derive their value from an underlying asset and allow parties to transfer risk.
- Derivatives have existed for centuries as ways to hedge commodity price risks, though financial derivatives became more prominent in the 1970s.
- One of the earliest commodity exchanges was founded in 1848 in Chicago, and the first futures contracts were traded there in the 1860s on agricultural goods. Currency futures and interest rate futures followed, along with the development of stock indexes and options markets.
Mutual funds
A mutual fund is an investment tool that pools money from many investors and invests it in stocks, bonds, and other securities. The document summarizes the history and growth of mutual funds in India from 1963 to the present in four phases. It describes the types of mutual funds including by maturity, investment objective, and advantages for investors such as portfolio diversification, professional management, reduced costs and risk, and liquidity.
Ppt 9-derivatives-16-5-12
Derivatives are financial instruments whose value is derived from an underlying asset such as commodities, currencies, bonds or stocks. Forwards and futures are types of derivatives that allow parties to lock in prices for assets that will be delivered or settled for in the future. Forwards are private, bilateral contracts while futures are standardized contracts traded on an exchange with clearing houses that act as intermediaries, reducing counterparty risk. Key differences between forwards and futures include their level of standardization, margin requirements, market liquidity and mode of delivery or settlement.
3. Trading - Types of derivatives
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Forward and futures - An Overview
This ppt is prepared to provide detailed information regarding Forwards and Futures contracts of Derivatives the topics covered under this are Meaning of Forwards contracts, Underlying Assets of Forwards contracts, FEATURES OF FORWARD CONTRACTS, Tailored made, Why Forwards contracts, FUTURES CONTRACT, What is A Futures Contract, Characteristics of Futures contracts, Mechanism of Trading in Futures Market, Margin requirement, Marking-to-market (M2M), SETTLING A FUTURE POSITION, OFFSETTING, CASH DELIVERY, by Sundar, Assistant Professor of commerce.
Subscribe to Vision Academy for Video assistance
https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
Indian Derivatives Market
Derivative is a contract or a product whose value is derived from value of some other asset known as underlying.
Mutual fund
A mutual fund is a professionally managed investment scheme that pools money from many investors to purchase stocks, bonds and other securities. It allows individual investors to diversify their holdings and benefit from professional fund management at a low cost. The money collected is invested in different securities and the income and capital appreciation is shared by unit holders proportionate to their investment. Mutual funds provide an opportunity for common investors to invest in a basket of securities with a relatively small amount of money.
Portfolio selection, markowitz model
PORTFOLIO, financial assets, Physical Assets, investment purpose, maximize his returns, and minimize the risk, optimal portfolio., MARKOWITZ MODEL, statistical procedures, risk-return tradeoff, return on investment, risk-averse., monetary inflow, variance of return, efficient frontier, Investment objective, portfolio manager, DIVERSIFICATION, consistent return, Lower risk, portfolio, securities by industry, Systematic risk, unsystematic risk, riskless borrowing, preference for return
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Derivatives
This document provides an introduction to derivatives, including:
- Derivatives derive their value from an underlying asset and allow parties to transfer risk.
- Derivatives have existed for centuries as ways to hedge commodity price risks, though financial derivatives became more prominent in the 1970s.
- One of the earliest commodity exchanges was founded in 1848 in Chicago, and the first futures contracts were traded there in the 1860s on agricultural goods. Currency futures and interest rate futures followed, along with the development of stock indexes and options markets.
Mutual funds
A mutual fund is an investment tool that pools money from many investors and invests it in stocks, bonds, and other securities. The document summarizes the history and growth of mutual funds in India from 1963 to the present in four phases. It describes the types of mutual funds including by maturity, investment objective, and advantages for investors such as portfolio diversification, professional management, reduced costs and risk, and liquidity.
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Derivatives are financial instruments whose value is derived from an underlying asset such as commodities, currencies, bonds or stocks. Forwards and futures are types of derivatives that allow parties to lock in prices for assets that will be delivered or settled for in the future. Forwards are private, bilateral contracts while futures are standardized contracts traded on an exchange with clearing houses that act as intermediaries, reducing counterparty risk. Key differences between forwards and futures include their level of standardization, margin requirements, market liquidity and mode of delivery or settlement.
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Subscribe to Vision Academy for Video assistance
https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
Indian Derivatives Market
Derivative is a contract or a product whose value is derived from value of some other asset known as underlying.
Mutual fund
A mutual fund is a professionally managed investment scheme that pools money from many investors to purchase stocks, bonds and other securities. It allows individual investors to diversify their holdings and benefit from professional fund management at a low cost. The money collected is invested in different securities and the income and capital appreciation is shared by unit holders proportionate to their investment. Mutual funds provide an opportunity for common investors to invest in a basket of securities with a relatively small amount of money.
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PORTFOLIO, financial assets, Physical Assets, investment purpose, maximize his returns, and minimize the risk, optimal portfolio., MARKOWITZ MODEL, statistical procedures, risk-return tradeoff, return on investment, risk-averse., monetary inflow, variance of return, efficient frontier, Investment objective, portfolio manager, DIVERSIFICATION, consistent return, Lower risk, portfolio, securities by industry, Systematic risk, unsystematic risk, riskless borrowing, preference for return
Financial Derivatives
The document discusses the history and uses of derivatives in the financial markets. It begins by explaining that derivatives emerged as hedging devices against commodity price fluctuations, but now account for two-thirds of total transactions and include a variety of complex instruments. The scope of the study is on derivatives in the Indian context, specifically futures and options on two companies traded on the National Stock Exchange over one month. The objectives are to study the role of derivatives in Indian markets and analyze profits/losses of option holders. The methodology uses primary data from interviews and secondary data from publications and the internet. Derivatives are then defined as contracts deriving value from underlying assets, with the primary purpose of transferring risk between parties.
FUTURES TRADING
This document provides an overview of futures markets and contracts. Key points include:
- Futures contracts are standardized agreements to buy or sell an asset at a predetermined price on a future date. This allows hedging of price risk.
- Margin deposits are required as security and daily gains/losses are settled, allowing high leverage from low margins.
- Speculators take on risk from hedgers for potential profit from price movements. Hedgers use futures to lock in prices and eliminate risk.
- Examples demonstrate how farmers can hedge crop prices and processors can lock in input costs using long and short futures positions.
Forex ppt
Foreign exchange refers to the exchange of one country's currency for another. The foreign exchange market allows currencies to be traded globally, 24 hours a day. Major participants include banks, brokers, and authorized dealers. Exchange rates are determined by supply and demand in the foreign exchange market. They can be fixed by governments or allowed to float based on market forces. Factors like economic performance, interest rates, trade balances, and political events influence exchange rate movements. Risks from exchange rate fluctuations must be managed through techniques like setting loss limits and controlling overall currency exposure.
Derivatives - Basics of Derivatives contract covered in this ppt
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
Derivatives market
The document provides an overview of derivatives markets, including the key terms and participants. It discusses how derivatives help transfer and hedge risks, facilitate price discovery, and catalyze economic activity. The main types of derivatives are forwards, futures, swaps, and options. Forwards and swaps are over-the-counter derivatives privately negotiated between parties, while futures and options are exchange-traded standardized contracts. Hedgers use derivatives to offset price risks, while speculators and arbitrageurs take positions to profit from price movements.
Capital market ppt
The capital market allows investors to trade various investment instruments like bonds, equities, and mortgages. It connects investors with surplus funds to those with deficits, providing long-term and overnight funding. Financial instruments traded include equities, credit products, insurance, foreign exchange, hybrids, and derivatives. The capital market has two main segments - the primary market where new securities are issued, and the secondary market where existing securities are traded, creating liquidity.
Stock Index Future (SIF)
Stock index futures were introduced in India in 2000 by the Bombay Stock Exchange and National Stock Exchange based on recommendations from an earlier committee report. A stock index future is a type of futures contract based on a stock market index, with the first being introduced in 1982. Key features include a specified lot/contract size, margin requirements, cash settlement rather than physical delivery, and specifications around the underlying index, contract terms, and pricing model. Stock index futures can be used for hedging portfolio risk or speculating on market movements.
Exchange Traded Funds (ETFs)
Exchange traded funds (ETFs) are investment funds traded on stock exchanges like stocks. Most ETFs track an index such as a stock or bond index, holding assets like stocks, commodities, or bonds. ETFs may be attractive investments due to their low costs, tax efficiency, and stock-like features. While ETFs provide diversification and flexibility by being traded throughout the day, they also track narrow markets which can be volatile and lack long term track records.
Futures and options
Futures contracts obligate the buyer and seller to exchange an asset at a predetermined price on a future date. Options provide the buyer the right, but not obligation, to buy or sell the underlying asset at a predetermined strike price by a predetermined expiration date. The buyer pays a premium for this right. There are call and put options, where calls provide the right to buy and puts provide the right to sell. Options have limited downside risk for the buyer compared to futures contracts, but also have time decay as they approach expiration.
Arbitrage pricing theory (apt)
The document discusses the Arbitrage Pricing Theory (APT), which assumes an asset's return depends on various macroeconomic, market, and security-specific factors. The APT model estimates the expected return of an asset based on its sensitivity to common risk factors like inflation, interest rates, and market indices. It was developed by Stephen Ross in 1976 as an alternative to the Capital Asset Pricing Model. The APT formula predicts an asset's return based on factor risk premiums and the asset's sensitivity to each factor.
Derivative - Forward and future contract
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.
valuation of securities
The document discusses various methods for valuing different types of securities. It covers the valuation of debentures, preference shares, and equity shares. For debentures and preference shares, the valuation models discount future interest and principal cash flows to arrive at a present value. For equity shares, the dividend capitalization approach discounts expected future dividends, while the earnings capitalization approach discounts future earnings. Growth must be considered for shares but not for debentures or preference shares that offer fixed cash flows.
Financial derivatives ppt
The document discusses various types of financial derivatives including futures, forwards, options, and swaps. It explains that derivatives derive their value from underlying assets and are used to hedge risk or profit from price changes. Futures contracts are exchange-traded standardized agreements to buy or sell assets at a future date, while other derivatives like forwards and swaps are customized over-the-counter transactions.
Mutual fund ppt
This document provides information about mutual funds including their structure, types, history in India, advantages and disadvantages. It discusses that a mutual fund is a trust that collects money from investors and invests in stocks, bonds, money market instruments and other securities. The document outlines the key entities involved in mutual funds like sponsors, trustees, asset management companies, custodians and various distribution channels. It also summarizes the different types of mutual fund schemes and provides a brief history of mutual funds in India from 1964 to the present.
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This document discusses portfolio analysis and selection based on modern portfolio theory. It defines key terms like portfolio, phases of portfolio selection, the Markowitz model, efficient frontier, diversification and the optimum portfolio. The Markowitz model uses a mean-variance framework to identify efficient portfolios that maximize return for a given level of risk. An optimum portfolio provides the highest expected return for its risk level by balancing risk across different asset classes through diversification.
Investment management
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.
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The document provides an overview of financial derivatives, including definitions and types. It discusses common derivative instruments such as forwards, futures, options, and swaps. Forwards and futures are agreements to buy or sell an asset at a future date, while options provide the right but not obligation to buy or sell. Swaps involve exchanging cash flows. Derivatives are used for hedging risks and discovering prices. While they provide benefits like risk management, criticisms include speculation and increased systemic risk. The derivatives market has evolved over centuries with early markets in rice and currencies, and modern exchanges in commodities, stocks and foreign exchange.
CFM-Introduction to futures markets
1) Futures contracts are agreements to buy or sell an asset at a predetermined price on a specified future date. Commodity futures involve agricultural and industrial goods, while financial futures are based on stock indexes, interest rates, and currencies.
2) Futures contracts are used by hedgers seeking to offset price risk and speculators hoping to profit from price changes. Clearinghouses associated with exchanges guarantee trades and regulate deliveries.
3) The theoretical futures price is determined by arbitrage and equals the current cash price plus the cost of carry until the futures contract expires. Basis risk and cross-hedging risk can reduce the effectiveness of hedging strategies using futures.
Unit 4 mutual funds
Mutual funds pool money from investors and invest it in stocks, bonds, and other securities. The main benefits are professional management, diversification, liquidity, and low costs. A mutual fund is operated by a sponsor, trustee, asset management company, custodian, and registrar. There are different types of funds categorized by structure (open or closed-ended), investment objectives (growth, debt, balanced), and other factors. Mutual funds provide investors an opportunity to participate in markets and support the economy.
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This document summarizes various financial sectors including banking, gold, mutual funds, real estate, public provident fund, post office, share market, government bonds, and insurance. It provides an overview of each sector, describing what they are and their key merits and demerits. For example, it notes that banking accepts deposits and makes loans, while mutual funds pool money from investors to purchase securities. Real estate includes residential, commercial, industrial and land properties. The document aims to educate people on their financial options.
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This document provides guidelines for investment in the share market. It discusses the importance of saving money and outlines factors to consider for financial investments, such as safety, liquidity, returns, and diversification. It also describes different types of investments and criteria for securities. When investing in shares specifically, the document advises studying companies by analyzing parameters like financial performance, management quality, and market reputation over a long-term period of 5-7 years to minimize risk. Basic steps for investing in shares include opening a demat account, choosing between online trading or a broker, determining your investment amount, and selecting sectors.
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Financial Derivatives
The document discusses the history and uses of derivatives in the financial markets. It begins by explaining that derivatives emerged as hedging devices against commodity price fluctuations, but now account for two-thirds of total transactions and include a variety of complex instruments. The scope of the study is on derivatives in the Indian context, specifically futures and options on two companies traded on the National Stock Exchange over one month. The objectives are to study the role of derivatives in Indian markets and analyze profits/losses of option holders. The methodology uses primary data from interviews and secondary data from publications and the internet. Derivatives are then defined as contracts deriving value from underlying assets, with the primary purpose of transferring risk between parties.
FUTURES TRADING
This document provides an overview of futures markets and contracts. Key points include:
- Futures contracts are standardized agreements to buy or sell an asset at a predetermined price on a future date. This allows hedging of price risk.
- Margin deposits are required as security and daily gains/losses are settled, allowing high leverage from low margins.
- Speculators take on risk from hedgers for potential profit from price movements. Hedgers use futures to lock in prices and eliminate risk.
- Examples demonstrate how farmers can hedge crop prices and processors can lock in input costs using long and short futures positions.
Forex ppt
Foreign exchange refers to the exchange of one country's currency for another. The foreign exchange market allows currencies to be traded globally, 24 hours a day. Major participants include banks, brokers, and authorized dealers. Exchange rates are determined by supply and demand in the foreign exchange market. They can be fixed by governments or allowed to float based on market forces. Factors like economic performance, interest rates, trade balances, and political events influence exchange rate movements. Risks from exchange rate fluctuations must be managed through techniques like setting loss limits and controlling overall currency exposure.
Derivatives - Basics of Derivatives contract covered in this ppt
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Subscribe to Vision Academy for Video assistance
https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
Derivatives market
The document provides an overview of derivatives markets, including the key terms and participants. It discusses how derivatives help transfer and hedge risks, facilitate price discovery, and catalyze economic activity. The main types of derivatives are forwards, futures, swaps, and options. Forwards and swaps are over-the-counter derivatives privately negotiated between parties, while futures and options are exchange-traded standardized contracts. Hedgers use derivatives to offset price risks, while speculators and arbitrageurs take positions to profit from price movements.
Capital market ppt
The capital market allows investors to trade various investment instruments like bonds, equities, and mortgages. It connects investors with surplus funds to those with deficits, providing long-term and overnight funding. Financial instruments traded include equities, credit products, insurance, foreign exchange, hybrids, and derivatives. The capital market has two main segments - the primary market where new securities are issued, and the secondary market where existing securities are traded, creating liquidity.
Stock Index Future (SIF)
Stock index futures were introduced in India in 2000 by the Bombay Stock Exchange and National Stock Exchange based on recommendations from an earlier committee report. A stock index future is a type of futures contract based on a stock market index, with the first being introduced in 1982. Key features include a specified lot/contract size, margin requirements, cash settlement rather than physical delivery, and specifications around the underlying index, contract terms, and pricing model. Stock index futures can be used for hedging portfolio risk or speculating on market movements.
Exchange Traded Funds (ETFs)
Exchange traded funds (ETFs) are investment funds traded on stock exchanges like stocks. Most ETFs track an index such as a stock or bond index, holding assets like stocks, commodities, or bonds. ETFs may be attractive investments due to their low costs, tax efficiency, and stock-like features. While ETFs provide diversification and flexibility by being traded throughout the day, they also track narrow markets which can be volatile and lack long term track records.
Futures and options
Futures contracts obligate the buyer and seller to exchange an asset at a predetermined price on a future date. Options provide the buyer the right, but not obligation, to buy or sell the underlying asset at a predetermined strike price by a predetermined expiration date. The buyer pays a premium for this right. There are call and put options, where calls provide the right to buy and puts provide the right to sell. Options have limited downside risk for the buyer compared to futures contracts, but also have time decay as they approach expiration.
Arbitrage pricing theory (apt)
The document discusses the Arbitrage Pricing Theory (APT), which assumes an asset's return depends on various macroeconomic, market, and security-specific factors. The APT model estimates the expected return of an asset based on its sensitivity to common risk factors like inflation, interest rates, and market indices. It was developed by Stephen Ross in 1976 as an alternative to the Capital Asset Pricing Model. The APT formula predicts an asset's return based on factor risk premiums and the asset's sensitivity to each factor.
Derivative - Forward and future contract
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.
valuation of securities
The document discusses various methods for valuing different types of securities. It covers the valuation of debentures, preference shares, and equity shares. For debentures and preference shares, the valuation models discount future interest and principal cash flows to arrive at a present value. For equity shares, the dividend capitalization approach discounts expected future dividends, while the earnings capitalization approach discounts future earnings. Growth must be considered for shares but not for debentures or preference shares that offer fixed cash flows.
Financial derivatives ppt
The document discusses various types of financial derivatives including futures, forwards, options, and swaps. It explains that derivatives derive their value from underlying assets and are used to hedge risk or profit from price changes. Futures contracts are exchange-traded standardized agreements to buy or sell assets at a future date, while other derivatives like forwards and swaps are customized over-the-counter transactions.
Mutual fund ppt
This document provides information about mutual funds including their structure, types, history in India, advantages and disadvantages. It discusses that a mutual fund is a trust that collects money from investors and invests in stocks, bonds, money market instruments and other securities. The document outlines the key entities involved in mutual funds like sponsors, trustees, asset management companies, custodians and various distribution channels. It also summarizes the different types of mutual fund schemes and provides a brief history of mutual funds in India from 1964 to the present.
Capital Market
This Presentation gives a brief idea about the Capital market and the leading Stock Exchange Companies.
Portfolio analysis selection; portfolio theory, return portfolio risk, effici...
This document discusses portfolio analysis and selection based on modern portfolio theory. It defines key terms like portfolio, phases of portfolio selection, the Markowitz model, efficient frontier, diversification and the optimum portfolio. The Markowitz model uses a mean-variance framework to identify efficient portfolios that maximize return for a given level of risk. An optimum portfolio provides the highest expected return for its risk level by balancing risk across different asset classes through diversification.
Investment management
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.
Financial derivatives
The document provides an overview of financial derivatives, including definitions and types. It discusses common derivative instruments such as forwards, futures, options, and swaps. Forwards and futures are agreements to buy or sell an asset at a future date, while options provide the right but not obligation to buy or sell. Swaps involve exchanging cash flows. Derivatives are used for hedging risks and discovering prices. While they provide benefits like risk management, criticisms include speculation and increased systemic risk. The derivatives market has evolved over centuries with early markets in rice and currencies, and modern exchanges in commodities, stocks and foreign exchange.
CFM-Introduction to futures markets
1) Futures contracts are agreements to buy or sell an asset at a predetermined price on a specified future date. Commodity futures involve agricultural and industrial goods, while financial futures are based on stock indexes, interest rates, and currencies.
2) Futures contracts are used by hedgers seeking to offset price risk and speculators hoping to profit from price changes. Clearinghouses associated with exchanges guarantee trades and regulate deliveries.
3) The theoretical futures price is determined by arbitrage and equals the current cash price plus the cost of carry until the futures contract expires. Basis risk and cross-hedging risk can reduce the effectiveness of hedging strategies using futures.
Unit 4 mutual funds
Mutual funds pool money from investors and invest it in stocks, bonds, and other securities. The main benefits are professional management, diversification, liquidity, and low costs. A mutual fund is operated by a sponsor, trustee, asset management company, custodian, and registrar. There are different types of funds categorized by structure (open or closed-ended), investment objectives (growth, debt, balanced), and other factors. Mutual funds provide investors an opportunity to participate in markets and support the economy.
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This document summarizes various financial sectors including banking, gold, mutual funds, real estate, public provident fund, post office, share market, government bonds, and insurance. It provides an overview of each sector, describing what they are and their key merits and demerits. For example, it notes that banking accepts deposits and makes loans, while mutual funds pool money from investors to purchase securities. Real estate includes residential, commercial, industrial and land properties. The document aims to educate people on their financial options.
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This document provides guidelines for investment in the share market. It discusses the importance of saving money and outlines factors to consider for financial investments, such as safety, liquidity, returns, and diversification. It also describes different types of investments and criteria for securities. When investing in shares specifically, the document advises studying companies by analyzing parameters like financial performance, management quality, and market reputation over a long-term period of 5-7 years to minimize risk. Basic steps for investing in shares include opening a demat account, choosing between online trading or a broker, determining your investment amount, and selecting sectors.
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Financial Sectors in India.pptx
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18 years
Wife: 25 years
3. Expected income growth rate: 10%
4. Inflation rate: 7%
5. Life expectancy: 80 years
Calculation:
1. Current annual income: Rs. 6,00,000
2. Income after 18 years (when child becomes independent): Rs. 16,00,000 (considering 10% annual growth)
3. Income needed after 18 years adjusted for inflation: Rs. 35,00,000 (considering 7% annual inflation)
4. Number of years of income needed after child becomes independent: 62 years (80 years - 18 years)
5. Total income needed: Rs. 35,00,000
An Economies Analysis of Financial Structure is a tool to analysis on how eco...
This document discusses the economic analysis of financial structure and sources of external finance. It summarizes that:
1) Indirect finance through financial intermediaries like banks is a more important source of external business finance than direct finance through securities markets.
2) Asymmetric information problems like adverse selection and moral hazard help explain why intermediation is predominant and why debt is used more than equity.
3) Financial intermediaries help address these problems through tools like monitoring, private information production, and net worth requirements for borrowers.
09 my tips - financial investment
This document provides tips for financial investment. It begins by distinguishing between saving and investment, noting that saving provides the funds for investment and that both are important for a happy life. Several factors for consideration when making financial investments are discussed, including safety, liquidity, returns, and diversification. Different types of investments are also outlined such as real estate, bank deposits, insurance policies, and shares. The document concludes by emphasizing the importance of also investing in education, health, family, and relationships to lead a happy life.
Which is a better investment- Fixed Deposits vs. Real Estate (1).pdf
One of the finest methods to increase wealth is to invest wisely, something that someone who has succeeded financially will advise. Investors need to look into and focus on the investments that will provide them with the necessary returns. Investors can get the stability they want with low-risk investments because they are assured returns.
FINANCIAL SECTORS PRESENTATION
Prepare a PPT on Financial Sectors in 16 to 18 slides:
(Each financial sector should have 2 slides-
1. In 1st slide we have to introduce the sector
2. In 2nd slide we have to mention the Pros and Cons of investing in that sector)
Sector's to be covered-
▶Share market
▶Mutual funds
▶Gold
▶Bank/FD
▶PF
▶Real estate
▶Post office
▶Insurance
Introduction to investments
This document outlines the course Securities Analysis and Portfolio Management. The objectives of the course are to provide students with frameworks for evaluating investment avenues and managing funds. It will cover various financial instruments, markets, regulations, and portfolio management techniques. The course is divided into 6 units that will cover topics such as fixed income securities, security analysis methods, modern portfolio theories, and portfolio strategies. Students will learn to analyze investments and manage portfolios effectively.
4 - Introduction to Securities Markets for Students.pptx
The document introduces securities markets, defining them as markets where securities like equity shares, preference shares, debentures, bonds, mutual funds, and government securities are bought and sold. Securities markets are part of the capital market and are essential as they provide entrepreneurs a way to raise capital and investors a way to invest money and exit investments. The document also discusses why investing is important by allowing money to grow, outlines parameters to assess investments, and lists some reasons why securities are a popular investment class.
Thought of the Week - Concentrated Holdings have no place in a Portfolio
Global Financial Private Capital is an investment advisory firm located in Sarasota, Florida that is registered with the SEC. It provides investment advisory services through affiliated companies and urges clients to avoid concentrated holdings of a single stock due to the high risks they pose. The document discusses the example of Enron, where both employees and investors suffered major losses when the stock price collapsed after fraud was uncovered, since they had over-allocated to the company's stock. It argues that diversification across different asset classes, geographies, sectors and styles is important to manage risk.
Investments
The document discusses various types of investments including stocks, mutual funds, real estate, gold, fixed deposits, insurance schemes, and foreign exchange. It provides advantages and disadvantages of stocks, mutual funds, real estate, and fixed deposits. It also gives an example of how one person who only used savings accounts had 1.3 crore after 25 years, while another who invested in stocks, deposits, and real estate had 4 crore over the same time period, showing the benefits of diversifying investments.
Similar to Merits & demerits of types of investment (20)
How Wealthy People Use Professional Money Management
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An Economies Analysis of Financial Structure is a tool to analysis on how eco...
An Economies Analysis of Financial Structure is a tool to analysis on how eco...
Which is a better investment- Fixed Deposits vs. Real Estate (1).pdf
Which is a better investment- Fixed Deposits vs. Real Estate (1).pdf
4 - Introduction to Securities Markets for Students.pptx
4 - Introduction to Securities Markets for Students.pptx
Thought of the Week - Concentrated Holdings have no place in a Portfolio
Thought of the Week - Concentrated Holdings have no place in a Portfolio
Merits & demerits of types of investment
- 1. Merits & Demerits of Types of Financial Investments Deepak Dwivedi BBA E1 (Vth)
- 2. Various financial sectors 1. Real Estate. 2. Shares. 3. Gold. 4. Post Offices. 5. Banking . 6. Mutual Funds. 7. Government Bonds. 8. PPFs , EPFs & PFs. 9. Insurance.
- 3. Merits 1. Opportunity to earn rental income. 2. Higher control on the assets. 3. Rental rates rise whenever a lease expires. 4. Great diversification. Demerits 1. Unattractive locations may not be taken into consideration. 2. Change in the government could hinder the rates of property. 3. Additional expenses. 4. Sudden government plans can cause huge losses in the investment. Real Estate
- 4. Merits 1. Easy liquidity. 2. Flexibility. 3. Versatility. 4. Maximum return. 5. Time Value of money. 6. Limited liability. Demerits 1. Knowledge about the market is a must. 2. Might not give the desired result. 3. De-mat account required 4. Have to seek external help for investment. 5. No life cover. Shares
- 5. Merits 1. High Liquidity. 2. One of the most desired community. 3. Holds its value for long time. 4. Diversification. 5. Start with a small amount. Demerits 1. Extra bank charges are to be given for deposits. 2. Difficult to store. 3. Losses begin from the time of purchase. 4. Less Resale value. 5. Subject to Confiscation. 6. Partial liquidity. 7. May subject to a crime in the outside world. Gold
- 6. Merits 1. Withdrawal before completion. 2. Safe and Secure mode of savings. 3. The A/C can be transferred from one post office. 4. Electronic deposits. Demerits 1. Rate of interest. 2. No Computerization. 3. No Roaming facility. 4. Reliability on the agent. 5. Allocation issues. Post Office
- 7. Merits 1. Guaranteed returns. 2. Easily withdrawal. 3. Flexible in nature. 4. Encourages saving habits. 5. Higher rate of returns. Demerits 1. No flexibility to access your funds. 2. Relatively low investment returns. 3. Time consuming. 4. Additional charges may occur at the time of breaking of FD. Banking
- 8. Merits 1. Reduces investment risk. 2. Diversification at low cost. 3. Professionally managed. 4. Ease of liquidity. 5.Time value of money. Demerits 1.High expense ratios and sales charges. 2.Misleading during investment. 3.No insurance against losses. 4.Trading limitations. Mutual funds
- 9. Merits 1. Tax free. 2. Less risk. 3. Good long term returns. 4. Early redemption is easy 5. Diversifies Portfolio Demerits 1.Vulnerable at the time of fiscal crisis. 2.Low rate of investment (depends on inflation/deflation). 3.Burden on the government. 4. Limit to investment. Bonds
- 10. Merits 1. Generates guaranteed returns. 2. The maturity proceeds are exempt from taxes. 3. Safety of capital. 4. Can be opened in the name of minor along with a guardian. Demerits 1. Lack of liquidity. 2. Cannot be opened by HUF, NRI, trust etc. 3. Joint account is not permissible. 4. Big lock in period of 15 years. 5. Account cannot be closed prematurely. PPF , PF , EPF
- 11. Merits 1. Comes under 80©. 2. Guaranteed income. 3. Tax benefits. 4. Mortgage recovery. 5. Risk guard. 6. High Liquidity. Demerits 1. Lack of awareness. 2. Inconsistent premiums. 3. Trust worthiness. 4. Lengthy legal formalities. Insurance
- 13. Thank you.