Global Subprime Crisis Impact on India

Global Subprime Crisis emerged in the US housing mortgage market in the year 2007 and gradually snowballed into a global financial crisis, leading to a global economic recession. The transmission of shocks of the crisis was mainly in two phases. First, it started with Inflation and then led to global financial crisis. There was a simultaneous increase in food and commodity […]

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Portfolio Construction – Traditional & Modern Approach

Portfolio construction refers to a process of selecting the optimum mix of securities for the purpose of achieving maximum returns by taking minimum risk. A portfolio is a combination of various securities such as stocks, bonds and money market instruments. Diversification of investments helps in spreading risk over many assets; hence one must diversify securities in the portfolio to create […]

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Derivatives Market – Option, Futures, Forwards

A derivatives market is a market where derivatives are bought and sold by investors. Derivative A derivative is a financial contract, the value of which, is derived from an underlying asset (share, commodity, currency, security etc.). If the value of underlying asset declines the value of the derivative also decreases and vice versa. Options An option is a right, but not […]

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Fundamental Analysis – Economic, Industrial & Company Factors

An investor conducts fundamental analysis and technical analysis to predict the future price movements of securities by analyzing the Economic factors, Industrial factors and Company specific factors.  Various economic, industrial and company specific factors can have a direct bearing on prices of securities. A fundamental analysis helps an investor to understand the general behaviour of the market, industry or a company and […]

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Technical Analysis – Dow Theory, Trends, Indicators

Technical analysis is conduct by an analyst to study the price movements of stocks in the security market. An investor buys securities when there is an upward price movement and sells securities when there is a downward price movement. Technical Analysis is the process of identifying trend reversals at an earliest stage to formulate the buying and selling strategy with […]

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Risk – Causes, Systematic & Unsystematic Risk, Types

Risk – It refers to the degree or probability of loss in the future. Causes of Risk Wrong decision or Wrong timing Term of Investment – Long term investments are more risky than short-term investments as future is uncertain. Level of Investment – Higher the quantum of investment the higher is the risk. Nature of Industry – Risk is higher […]

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Credit Control By RBI / Central Bank – Objectives, Tools, Importance

Credit control is an important tool of the monetary policy used by Reserve Bank of India (central bank) to control the demand and supply of money and flow of credit in an economy. RBI keeps control over the credit created by commercial banks. Objectives of Credit Control The primary objective according to RBI is ‘to control inflationary tendencies present in the […]

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Commercial Banks – Types, Functions, Role in Economic development

Commercial Banks comprise of public sector banks, private sectors banks and foreign banks which represent the most important financial intermediaries in the financial system of a country. Commercial Banks play a crucial role in the banking industry of a country. A commercial bank is an institution whose debts are widely accepted in settlement of other people`s debt to each other. […]

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