‘Gilts’ is the short form for gilt-edged securities- so called because they carry no risk. Gilt Account Holder (GAH)/Constituent means an entity or a person including ‘a person resident outside India’ maintaining a “Gilt Account” with a Custodian.[“Custodian” is a primary member (PM) permitted by the Reserve Bank of India to open and maintain Constituent…
Corporate governance is the system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests between companies and their stakeholders, such as shareholders, management, customers, suppliers, financiers, government and the society. Corporate governance specifies the distribution of rights and responsibilities among different participants in the…
In simple words, if an investment is held till its maturity date, the rate of return that it will generate will be Yield to Maturity. YTM is the estimated internal rate of return earned by an investor who buys the bond today at the market rate on the assumption that it will be held until…
Alternative Investment Fund or AIF refers to funds established or incorporated in India which is a privately pooled investment vehicle that collects funds from super-rich investors, whether Indian or foreign, for investing by a defined investment policy for the benefit of its investors. Category I AIF: * Venture capital funds (Including Angel Funds) * SME…
We generally identify four different types of economies viz. market economy, command/Planned economy, mixed economy. and traditional economy. Let us examine here how these economies function. What is a market economy? A Market economy is an economy in which most goods and services are produced and distributed through free markets wherein the market determines investments,…
Capitalism is an economic and political system in which private ownership controls the trade and industry of the country. In capitalism system the wealth is concentrated in the hands of a few people. The idea of these private owners is capital accumulation; make maximum profit without worrying about social constraints like unemployment, exploitation of labours…
Microeconomics refers to supply and an individual market. On the other hand, macroeconomics is the study of a national economy as a whole. The key differences between micro and macroeconomics are distinguished as follows. Microeconomics Macroeconomics Microeconomics studies the particular market segment of the economy Macroeconomics studies the whole economy, that covers several market segments…
Underwriting is a process generally takes place in initial public offerings (IPO). The underwriter to an IPO guarantees payment in case of damage or financial loss to the share issuing company. The under writer may accept financial risk for liability either on firm commitment or best effort basis. Here best efforts means that the underwriters…
A negotiable certificate of deposit (NCD) is a certificate of deposit issued by the banks and it is freely negotiable unlike non-negotiable CDs which cannot be transferred, sold, bought, or exchanged. The Certificates of Deposit (CDs) were introduced in India in 1989.Minimum amount of a CD should be Rs.1 lakh. In India, CDs in physical…
Option is an agreement between two parties offering to buy or sell a security (a stock, bond, commodity or other instruments) from or to the other party at a specified price within a specific time period. In option contracts, there is no obligation on the part of buyer or seller to buy or sell the…