Search Results

Portfolio evaluation is a crucial part of the investment management process that involves assessing the performance of an investment portfolio to determine its success and identify areas for improvement. This evaluation helps investors understand how well thei...

1. Sharpe's Ratio Sharpe's ratio is a tool used to help investors understand the return of an investment compared to its risk. The idea is to find out how much excess return you are receiving for the extra volatility that you endure for holding a riskier asset...

A bond is a debt investment where an investor loans money to an entity (corporate or governmental) which borrows the funds for a defined period at a fixed interest rate. Bonds are commonly used by companies, municipalities, states, and sovereign governments to...

Current Yield is a financial metric used to evaluate the annual return rate of a bond based on its current market price rather than its face value. This measure is particularly useful in the secondary market where bonds can be bought and sold at prices that di...

Yield to Maturity (YTM) is a crucial concept in bond investing, representing the total return anticipated on a bond if held until its maturity date. It is expressed as an annualized rate in percentage terms. Overview YTM is considered the internal rate of retu...

Yield to Call (YTC) is an important concept in bond investing when considering bonds that can be redeemed before their scheduled maturity date. This measure calculates the expected return on a bond if it is called (redeemed early) by the issuer under the terms...

The price-yield relationship of bonds is a fundamental concept in the bond market, describing how bond prices are inversely related to their yields. Understanding this relationship is crucial for both new and seasoned investors as it affects investment decisio...

Definition of Bond Valuation Bond Valuation is a financial technique used to determine the theoretical fair value of a particular bond. This process involves calculating the present value (PV) of all future cash flows associated with the bond. These cash flows...

1. Current Yield a. Example 1 What is the current yield of a 10-year 12% coupon bond with a face value of Rs. 1000 and currently selling at Rs. 950? Solution: Calculation of Current Yield: $CY = \frac{In}{Po} \times 100$ $In = \text{Annual Interest} = 1000...

Investment involves committing resources now to gain future benefits. It's both a science and an art, balancing data-driven strategies with intuitive decision-making. The relationship between risk and return is fundamental; higher returns often come with highe...

Investing, speculating, and gambling are three distinct approaches to increasing wealth or achieving financial gains, each with its own set of characteristics, risk levels, and strategies. Understanding these differences is crucial for making informed decision...

Investing involves allocating funds with the expectation of achieving various financial goals. These goals can be broadly categorized as follows: Income Dividend/Interest: Investments can provide regular income through dividends (for equity investments) or ...

Investment decisions are affected by a variety of factors. Understanding these can help investors make informed choices that align with their goals, risk tolerance, and financial situation. Risk Tolerance Definition: Risk tolerance is the degree of variabil...

Set Investment Policy Adage Insight: "If you don’t know where you are going, any road will do." Purpose: Establishes a strategic plan that guides all investment efforts. Components: Determination of Objectives: Identifying risk and return goals. Invest...

Investment Scenario Investing involves allocating funds to assets with the goal of earning income or capital appreciation. It implies sacrificing current consumption in anticipation of future returns. The essence of investment can be distilled into three key a...

The E-I-C (Economy-Industry-Company) framework provides a structured approach to analyze investment opportunities by examining economic trends, industry dynamics, and company-specific factors. This comprehensive analysis helps investors to make informed decisi...

Understanding different types of financial charts is crucial for analyzing market trends, making investment decisions, and tracking the performance of various financial instruments. Here, we explain four fundamental chart types: Line Chart, Bar Chart, Point an...

Chart patterns are crucial tools in technical analysis, helping traders and investors to anticipate future price movements based on historical formations. Here's an expanded look at several key patterns: V Formation The V Formation signifies a rapid reversal i...

Oscillators are technical analysis tools that oscillate between two extremes. They are used to identify overbought or oversold conditions, signal potential trend reversals, and gauge momentum. Moving Average Convergence/Divergence (MACD) MACD is a trend-follow...

In the context of financial markets, support and resistance levels represent key concepts that traders and investors use to identify potential turning points on price charts for a stock, commodity, currency, or any other tradable instrument. Support Level A s...