Money Market v/s Capital MarketBoth the money market and the capital market are the two separate types of financial markets where the money market is used for short-term borrowing and lending purposes, while the capital market is used for long-term investments, i.e. assets with maturities exceeding one year. (more…)
What is Liquidity Risk?
In respect to finance, liquidity means that how comfortably the assets (bonds, shares, plant, property, equipment, etc.) can be converted into cash. Thus, by the term ‘liquidity risk’ we can comprehend that a risk that a company or a bank may have to face when it is not able to meet its short-term financial liabilities. Most of the time it happens when the company or a bank is unable to convert a security or a hard asset (property, machinery, equipment, etc.) into cash without the loss of capital or income in the process. There are three kinds of liquidity risks: Funding Liquidity Risk, Trading Liquidity Risk, and Operational Liquidity Risk.(more…)
What is Cross Hedge?When the characteristics of the underlying position match perfectly with that of futures contract specifications, it is said as perfect hedge. A hedge that is established with either a mismatched maturity or a mismatched asset or both is referred to as a cross hedge and the risk arising from it will be called as Basis Risk. (more…)
Introduction to Investment BankingInvestment Banks: Investment banking is a special segment of banking operation that helps individuals or organizations raise capital and provide financial consultancy services to them. Examples of Investment Banks: Bank of America, Barclays Capital, Citigroup Investment Banking, Deutsche Bank, and JP Morgan are some of the largest investment banks in India. (more…)
What is Forward Rate Agreement (FRA)?A Forward Rate Agreement or FRA refers to foreign exchange or interest rate hedging strategy. It is an agreement between two parties who want to protect themselves against future movements in interest rates/changes in the currency exchange rate. Interest rate FRA is a forward contract that gives right and obligation to two parties to agree that a certain interest rate will apply to a principal amount (notional) during a specified future date for specified time. (more…)
CFA or CA - Which is better?CFA is employed in the field of investment management. Compensations for CFA are very high as compared to CA. Before deciding on any field you need to assess your interest first. Do not follow the herd rule. Passing a CFA exam is an arduous task, it takes dedication, commitment, determination, and also it shows how committed an individual is towards their career. It is beneficial for the company to hire CFA’s also; it has benefits for a candidate as it is considered as one of the highest-paid professions. (more…)
Career Opportunities for CFA in IndiaWhat is CFA?
- A Chartered Financial Analyst (CFA®) is a globally recognized certification provided by CFA Institute.
- The exam is conducted in 3 levels.
- First level exams are conducted Four times -(February, May, August, and November) and the Second and Third levels are conducted annually (June).
- If you are able to clear the exam in the first attempt than ideally, you should be able to clear the exam in around 2.5 to 3 years.
- Further, you need 4 years of experience to get certified plus a bachelor's degree.
Asian Financial Crisis: A brief overviewThe Asian Crisis started with the devaluation of currency “Baht” in Thailand and other events that affected other Asian countries like South Korea, Malaysia, Indonesia, Singapore, and the Philippines. The stock markets tumbled drastically and the value of the currency declined nearly by 60%. Heavy buying of US Treasuries to ensure the stability of currencies led to an increase in foreign debts and were the reason for spreading the crisis to other Asian countries. (more…)