Alternative Investments

Alternative Investments

Alternative Investments

Investing is owning an asset or item with the intention of generating some income or appreciation in the value of the asset. An investment is any means to generate an income in the future including bonds, stocks, real estate, etc. Alternative investments are unconventional investments or investments other than stocks, bonds, and cash. Generally, these types of investments are done by large institutions, high net worth individuals, etc due to their complexity, riskiness, and lack of regulation.

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European Options

European Options

European Options

When an investor has the right, but not the obligation, to buy or sell a stock at an agreed-upon price and date, it is known as a stock option. There are two types of options: the put option which is a bet that a stock will fall, or the call option which is a bet that the price of a stock will rise. (more…)
2008-2009 Global Financial Crisis

2008-2009 Global Financial Crisis

2008-2009 Global Financial Crisis

The financial crisis of 2007-2008 is assumed to be the result of active waiting to erupt for years. The long-time racket of dirt-cheap credit showed its signs in the summer of 2007 around financial markets throughout the world. From Bear Stearns hedge funds to BNP Paribas and even the British bank Northern Rock were all up to their neck in debt and at the peak of defaulting. (more…)
Investment Securities

Investment Securities

Investment Securities

Investment securities are financial assets that are tradable in financial markets such as equities and fixed income instruments. These are purchased to hold them for a longer period of investment. This is in contrast to securities that are purchased by broker-dealer or other financial intermediately for resale short-term speculations. Investment securities are subject to governance via article 8 of the Uniform Commercial Code (UCC). (more…)
CHEAPEST TO DELIVER

Cheapest to Deliver

Cheapest to Deliver

Cheapest to deliver is a method that is used to estimate which is the least expensive future contract for a seller to deliver to its buyer. The conversion factor is used to estimate the cheapest value. This conversion factor is generated by the Chicago Board of Trade (CBOT) and Chicago Mercantile Exchange (CME). Investors trading in futures contracts must be aware of the term cheapest to deliver and must gain a full understanding of this method. (more…)
Fixed-Income Security

Fixed Income Security

Fixed Income Security

Fixed Income Security is a type of debt instrument in which the issuer is liable to pay fixed income with a fixed interest rate to the investor. At the time of the purchase of these securities, a rate of interest is fixed, to be provided to the investor at the time of maturity. Under this type of instrument, the return is generally low because the risk associated which fixed-income security is very less, and because of this the return is also comparatively low. Fixed Income Security is mainly issued by the government, companies, and corporations to manage their cash flow. (more…)
Asset Class

Asset Class

Asset Class

An asset class is a group of investment securities that can be classified as physical assets or financial assets. A set of financial instruments have similar characteristics and can react similarly the same in the marketplace based upon the market events. It is important to understand where your money goes and what the asset class is going since each investment belongs to one or more groups of assets. Such asset classification definitely made investment easier to understand for the investors. (more…)
Open Ended Investment Company

Open-Ended Investment Company

Open-Ended Investment Company

Open-Ended Investment Company is also known as OEIC is a format or structure to invest in various bonds, securities, and stocks which are formed under Corporation of Open-Ended Investment Company Regulations 2001 in the United Kingdom. The shares in OEIC are listed on the London Stock Exchange (LSE). These funds can adjust the fund size according to the investor’s preference and the prices of the shares are based on the fund size of the investor. (more…)
CMO vs CDO

CMO vs CDO

CMO vs CDO

There are several product categories within the Investment Bank and one of them is the Structured Finance Category.  It is a complex method of financing that aims to reduce significant risks associated with complex assets. These instruments are designed to meet the unique requirements of an investor, depending on the risk tolerance, with a variation of customized assets. (more…)
Days Payable Outstanding

Days Payable Outstanding

Days Payable Outstanding

It is important to regularly assess the performance of the company in order to enhance it. One of the most important measures to track the total efficiency and productivity in accounts payable (AP) is Days Payable Outstanding (DPO). (more…)