Financial instruments provide efficient flow and transfer ofcapitalamong the world’sinvestors. They areassetsthat may be in the form of cash, a contractual right to deliver or receive cash or another type of financial instrument, or evidence of ownership in some entity. Key Takeaways A financial...
Summary This chapter describes many of the different types of fixed-rate, floating-rate and index-linked bonds and short-term money market instruments that have been issued together with some other financial instruments that work in a similar way. A common embedded bond option is the ability of...
Financial instruments are securities that both large and small investors can use to gain exposure to the financial markets. Some of these securities are common, such as equity or stock investments, as well as bonds or debt securities. Small investors and institutional investors, including mutual fun...
Today, investment is mostly associated with financial instruments that allow individuals or businesses to raise and deploy capital to firms. These firms then rake that capital and use it for growth or profit-generating activities. While the universe of investments is vast, here are the most common...
Debt Capital: Debt capital is borrowed money that a company raises by issuing bonds, loans, or other debt instruments. This type of capital structure comes with the obligation to make periodic interest payments and eventually repay the principal amount. Debt can be short-term (such as bank loan...
Functions of Capital Market Mobilization of savings to finance long term investments. Facilitates trading of securities. Minimization of transaction and information cost. Encourage wide range of ownership of productive assets. Quick valuation of financial instruments like shares and debentures. ...
Interest rate volatility management: In periods of high interest rate volatility, swaptions become valuable instruments for managing uncertainty. The optionality they provide allows users to adapt to changing market conditions. Capital structure optimisation: Swaptions can be employed to optimise a company...
Money gets invested in fixed income instruments like government bonds and debentures under income funds. The objective of the income fund is stable income on investment with modern growth of capital. Liquid Funds The money gets invested in short-term financial instruments like treasury bills, deposit...
Capital marketHow do financial markets operate on a daily basis? This first of four volumes introduces the structures, instruments, business functions, technology, regulations, and issues that commonly found in financial markets. Placing each of these elements into context, Tee Williams describes what...
Term Deposits are safe investment instruments, unaffected by market volatility. To ensure your money grows steadily while managing risk, diversifying your investment portfolio is crucial. It should include instruments that offer high returns alongside those that protect your capital. While equities cater ...