Financial ratio
March 6th, 2014
A financial ratio can be defined as a comparative magnitude of two selected statistical values taken from the financial statements of a business enterprise. Being used in accounting very often, numerous standard ratios are used for evaluation of the ...
Repo (Repurchase agreement)
March 6th, 2014
Repo is an agreement in which one party sells a security to another party and agrees to repurchase it on a specified date for a specified price. In other words it is an agreement with a commitment by the ...
Hedge Funds
March 6th, 2014
A Hedge fund, usually used by wealthy individuals and institutions, is allowed to use aggressive strategies that are unavailable to mutual funds, including short selling, leverage, swaps, arbitrage, and derivatives. Hedge funds are exempt from many of the rules ...
UCITS – (Undertakings for Collective Investment in Transferable Securities)
March 6th, 2014
UCITS are open-ended undertaking for collective investment in transferable securities. (UCITS) is an undertaking the sole object of which is the collective investment in transferable securities and/or in other liquid financial assets of capital raised from the public, and ...
Mutual Funds
March 6th, 2014
An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to ...
Structure products
March 6th, 2014
Structured products are synthetic investment instruments specially created to meet specific needs that cannot be met from the standardized financial instruments available in the markets. Structured products can be used: as an alternative to a direct investment; as part ...
SWAPS
March 6th, 2014
A Swap is an agreement between two parties (the counterparties) to exchange a series of future cash flows at specified future times according to pre-specified conditions, typically with a notional principal and a stated maturity, often close to the ...
Forward Rate Agreement (FRA)
March 6th, 2014
Forward rate agreement (FRA) is an over-the-counter contract in which one party pays a fixed interest rate, and receives a floating interest rate equal to a reference rate (the underlying rate). The payments are calculated over a notional amount ...
Differences between Forward and Future contracts
March 6th, 2014
Forward Futures Not standardized. They offer flexibility in terms of maturity date and contract amount, but they lack liquidity because there is no standard format. Standardized. They are for standard amounts and for standard maturity dates, usually the third ...
Future Contracts
March 6th, 2014
A future contract is a legally binding agreement between two parties to buy or sell a specific quantity of a specific underlying instrument on a certain date in the future (expiry date) at a price agreed upon when concluding ...
