SWAP transactions in capital and Forex Market
A swap is a derivative contract where two parties agree to exchange cash flows or liabilities from different financial instruments over a set period of time. In the other words, a ‘Swap’ is an act of exchanging one thing for another. In derivative market, currencies swap, interest rates swap or commodities swaps are most common. The…
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Characteristics & Functions of Derivatives
Derivatives are financial contracts that derive their value from an underlying asset. These contracts play a significant role in the financial markets and exhibit several key characteristics and functions. Characteristics of Derivatives Hedging Hedging involves purchasing one asset to reduce the risk of loss associated with another asset. In finance, this risk management technique focuses…
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Highlights of Union Budget 2025
In today’s Budget 2025 presentation, Finance Minister Nirmala Sitharaman announced several development measures across six key areas, focusing on the poor, youth, farmers, and women. Key Focus Areas Major Announcements on Taxation, Business Growth, Infrastructure, and Fiscal Policies To know the tax slabs for FY 2025-26, read: “NO INCOME TAX ON INCOME UP TO ₹12…
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Options: What are In the Money-ITM and Out of the Money-OTM?
Options are contracts through which a seller gives a buyer the right, but not the obligation, to buy or sell a specified asset (Ex: Foreign currency, shares, equities, commodities etc.) at a predetermined price, by a certain date. It means they acquire or dispose of the underlying asset at that price called the strike price.…
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Understanding Rights Debentures for Working Capital
A “right debenture” is a form of convertible debenture, granting the holder additional rights beyond just receiving interest payments. It allows the holder to convert the debenture into a certain number of shares of the issuing company at a predetermined price within a specific timeframe, essentially giving them the option to become part-owners of the…
Regulation of Bank Finance in India
Introduction The Banking Regulation Act of 1949 is the primary legislation governing banking activities in India. Bank regulation involves establishing and enforcing rules for banks and other financial institutions. It aims to maintain the stability and integrity of the financial system, protect consumer interests, and promote fairness and efficiency in markets. The Reserve Bank of…
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