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institutional clearing member icma financial institution has to subscribe to at least 100 equity shares of rs10000 each to become an institutional
the ability of a firm to satisfy its debt obligations can be assessed using three sets of ratiosshort-term solvency
spreadsthe difference between two futures price is referred to as lsquospread for the same underlying good if there are two different prices on two
the relationship between futures price and cash priceany commodity that can be bought in the market has a price which is referred to as cash or spot
a holder in debt obligation though does not have any opportunity to share in the economic growth of the firm is interested in a firms
exchange of physicalsa trader can also complete the futures contract by engaging in exchange of physicals in this method the parties agree to
in addition to management quality an assessment of the financial capacity of a company should also include an evaluation of trends
settlement mechanismnifty index futures and option contracts are cash settled all cms are required to open a separate bank account with nsccl
margining systemindian capital markets have finally acquired an international flavor with the market-wide rolling settlement coming into place on
market price is used for determining the duration of a mortgage-backed security in the coupon curve duration this approach to calculate
there are two approaches to value asset-backed securities they arezero-volatility spread z-spread approachoption-adjusted
a cash-flow yield is the discount rate that makes the price of a mortgage-backed or asset-backed security equal to the present value of its
interest rate derivativesindias first trading on interest rate derivatives began in the national stock exchange of india nse in june 2003 with
trading mechanism of futureflow of the orderany person who wants to trade in futures has to contact a futures commission merchant fcm or a broker
floor brokersthese people have the responsibility of executing the trades forwarded by the fcms on the floor of the exchange they can also trade for
forward contractsthe origin of forward contracts is lost in history some authors suggest that it was india where these contracts took birth while
functions of derivatives marketto reduce risk or eliminate risks some ways and methods are there risk in the capital market can be reduced by
the rise of derivative market in the 1980s the process of liberalization and deregulation of the financial markets gained momentum when the british
swap-linked notesinterest rate swaps are derivative products which help in transforming the cash flows of existing debt issues these are not only
advantages of floating rate noteswe know that the coupon rate is fixed for fixed rate bonds and that throughout its tenure the investor receives
types of frnsin an era of innovations while changing needs and preferences of the investors trigger introduction of newer frns the borrowers funding
reference indexevery frn chooses its own reference index upon which the calculation of each successive new coupon is based the most commonly used
floating rate notes frnswhen interest rates are high and the general outlook is either stable or indicating the possibility of a downward trend in
option-adjusted spread oasthe prime objective of an investor is to buy securities which have values greater than their market prices the discussion
we have seen the valuation of bonds with embedded option using binomial model this method can be used when cash flows do not depend on