Let us say you have Rs.1,00,000/- with you. With the Rs.1,00,000/- you start a business. The business earns Rs.20,000/- per year. You have added to the value of Rs.1,00,000/- By Rs.20,000/- This is known as investment because you increase the value of the money. Let us say you buy a Car with this Rs.1,00,000/-. If […]
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LIBOR is an acronym for London Inter Bank Offered Rate. LIBOR serves as a benchmark that gives an indication of the rate at which banks can borrow from London interbank market for a given period of time. The interbank borrowing is undertaken by financial institutions either to make profits or to cover short-term liquidity shortfalls.
An index fund is a portfolio constituted of stocks belonging to some market index such as the Sensex or Nifty. You can invest in an index fund either through a mutual fund or an exchange-traded fund (ETF). Now… The Sensex, as you may be aware, consists of 30 stocks in proportion to their free-float market
Many magazines mention that “to improve exports, the central banks need to depreciate the currency.” However, what does it mean and how do exports get a boost by depreciating the currency? To understand how lowering the exchange rate of a currency affects exports of the country, Let us understand through a story…. Mr. A is
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Why is ‘derivative trading’ a form of high gain – high loss trading with minimum investment? For the sake of understanding, you may replace “futures” with price of share. So, one must take a bet on the movement of the share price at the end of the period. Since one is looking at price movements,
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Rising interest rates come as sad news for those who wish to take a home loan or a car loan. However, rising interest rates bring several opportunities with them as well… And one opportunity in this regard is that of ‘Carry Trade,’ which means borrowing in one market where interest rates are lower and investing
India Inflation Rate reported at 0.27% for the week ending March 14, 2009! This had been the lowest since 1977. Did we go into negative space ? Yes, it was around – 0.36%. Will it happen next time? Did we head for deflation or was its disinflation? What are these terms and how do they
Green energy is a term for energy that comes from renewable sources. The terms ‘green energy’ and ‘renewable energy’ are often used interchangeably, but there is one essential (and sometimes confusing) difference between them. While most green energy sources are also renewable, not all renewable energy sources are considered entirely green. Green energy is often referred
The PEG Ratio or Price Earnings to Growth Ratio determines a stock’s value while considering future earnings growth. Like the P/E Ratio, the PEG Ratio is used to get a better understanding of whether a company’s stock is overpriced, underpriced or right (priced). The PEG Ratio uses the P/E Ratio of a company and compares
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Let’s assume you suddenly have a guest at home and you are running short of milk to prepare tea. In such a scenario you will have no option but to borrow some from your neighbors, which you can replace later. Likewise, external means non-Indian / foreign source, commercial would mean engaged in commerce and borrowing
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