The economy is like a tightrope walker, balancing carefully to avoid a fall. Governments and central banks act as skilled performers, using monetary and fiscal policies to maintain stability. But what exactly are these policies, and how do they impact your daily life? Let’s unravel the complexities. Monetary Policy: The Central Bank’s Steering Wheel Imagine…
Introduction Businesses need funds to grow, expand, or buy other companies. While bank loans (senior debt) are a common way to get money, they are not always enough. At the same time, raising funds by selling company shares (equity) can reduce the owner’s control over the business. In such cases, mezzanine debt acts as a…
1. Nominal Scale (Categorical Data) Definition: The nominal scale is the simplest form of measurement. It is used for categorizing data without any inherent order, ranking, or numerical significance. The only mathematical operation possible is counting how many times a category appears. Key Characteristics: No numerical meaning – The values are just labels or names….
1. What Are Exchange-Traded Derivatives (ETDs)? Exchange-Traded Derivatives (ETDs) are standardized financial contracts that are bought and sold on a regulated exchange like the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), or Chicago Mercantile Exchange (CME). These derivatives are used for hedging risk or speculating on price movements of stocks, commodities, currencies, or interest…
1. What Are OTC Derivatives? Over-the-Counter (OTC) derivatives are customized financial contracts that are traded directly between two parties, rather than on an exchange. These contracts allow businesses and financial institutions to tailor the terms to meet their specific risk management needs. Unlike Exchange-Traded Derivatives (ETDs), which are standardized and traded on regulated exchanges, OTC…
U.S. President Donald Trump’s recent announcement of a 25% tariff on steel and 10% on aluminium imports has sent shockwaves through global markets. While India’s direct exports to the U.S. are limited, the ripple effects could disrupt the Indian metal industry in unexpected ways. Here’s a look at what’s at stake for India—explained in…
Introduction: Why Currency Risk Matters In today’s interconnected global economy, Indian companies that engage in international trade often face a hidden challenge: currency risk. This risk arises when companies receive payments or make payments in foreign currencies. Fluctuations in exchange rates can lead to unexpected losses or reduced profits. So, how can Indian businesses protect…
Derivatives are generally classified into contingent claims and forward commitments: Contingent Claims: These are derivatives whose payoffs are dependent on the occurrence of a specific event. Examples include options and credit default swaps (CDS). Call Option Contract (B): This is a contingent claim because its payoff depends on whether the underlying asset’s price exceeds the…
बॉन्ड कंवेक्षिटी, मनी कंवेक्षिटी और ड्यूरेशन को आसान भाषा में समझें जब भी कोई इन्वेस्टर या फाइनेंस प्रोफेशनल बॉन्ड (Bond) में निवेश करता है, तो उसे यह समझना जरूरी होता है कि बॉन्ड की कीमत (Price) पर ब्याज दर (Interest Rate) के बदलने का क्या असर पड़ेगा। इसके लिए तीन मुख्य कांसेप्ट बहुत जरूरी हैं:…
Exams are often associated with immense pressure and stress. However, with the right approach, you can prepare effectively while maintaining a calm and focused mindset. The key is to manage stress efficiently and cover all topics conceptually with proper time management. Understanding the Root Cause of Exam Stress Exam stress typically arises from: Lack of…