A forward contract is a contract whose terms are tailor-made i.e. negotiated between buyer and seller. It is a contract in which two parties trade in the underlying asset at an agreed price at a certain time in future. It is not exactly same as a futures contract, which is a standardized form of the forward contract. A futures contract is an agreement between parties to buy or sell the underlying financial asset at a specified rate and time in future. While a futures contract is traded in an … [Read more...]

Nowadays, it is very difficult for an individual or entity, to buy an expensive asset in one go. In such a case, lease and finance are the two best courses of action, that allows a person to make use of the asset when they don't have ample sum to pay the price. The lease contract is an arrangement, wherein the entity can use and control the asset without actually buying it. It is a type of renting asset. On the other hand, finance is another alternative to buying the asset, in which the … [Read more...]

Grants are the financial assistance that is non-repayable in nature. It is provided by the government to the indivduals or entities, to fulfill a particular purpose, which is related to the welfare of general public. A grant is not exactly same as a loan, which means a sum of money borrowed from a financial institution or bank by an individual or entity, for a reason, that requires repayment along with the interest after the term expires, for which it is repaid. While a loan requires … [Read more...]

Gross Domestic Product or GDP refers to the economic value of goods and services produced within the nation's boundaries, in a particular financial year plus income earned by foreign residents locally less income earned abroad by country's residents. When the GDP is estimated at current prices, it exhibits Nominal GDP, whereas Real GDP is when the estimation is made at constant prices. Both Nominal and real GDP are considered as a financial metric for evaluating country's economic growth and … [Read more...]

Savings refers to that part of disposable income, which is not used in consumption, i.e. whatever is remained in the hands of a person, after paying all the expenses. On the other end, Investment is the act of investing the saved money into financial products, with a view of earning profits. It alludes to the increase in capital stock. For an enterprise, investment connotes the production of new capital goods, such as plant and machinery or change in inventories. Many people juxtapose savings … [Read more...]

The market is flooded with an array of investment options that allows the investors to earn money, when the stock market is rising or falling or going sideways. Options are one of the significant categories of derivative securities, which connotes a contract between parties, in which one party acquires right to trade the underlying security, at an agreed price, on or before a particular date. The right to buy is call option while when the right relates to selling, it is a put option. Calls … [Read more...]

The term 'financial derivative' implies futures, forward, options, swaps or any other hybrid asset, that has no independent value, i.e. its value is based on the underlying securities, commodities, currency etc. In this context, futures and options are often misconstrued, by many people. Futures may be understood as the legally binding contract to trade the underlying financial asset of standardized quality and quantity, at an agreed price, at a future specified date. Conversely, options … [Read more...]

When it's about investment, every investor look for different investment avenues park their funds and provide good returns, such as stocks, bonds, debentures, futures, options, swaps, and so on. While investing in stocks gives you an ownership interest in the company and also delineates clain in the company's property and profits. On the flip side, investment in bonds is considered far much safer than stock because it gets priority in repayment. It is a debt instrument, which signifies money … [Read more...]

IFRS Vs GAAP is the most debatable topic in accounting where the former is defined as the financial reporting method having universal applicability while the latter are the set of guidelines made for financial accounting. Since past few years, IFRS has gained significant importance, due to which over hundred countries of the world have adopted IFRS as the standard for accounting. The issuing organizations of the two are continuously working on their convergence. IFRS or otherwise known as … [Read more...]

Out of different investment avenues, mutual funds are considered as the safest form of investment. In mutual funds, many individual investors with common financial goal pool their money, and the asset management company invest the total fund in securities, in the capital and money market. On the other hand, Exchange Traded Fund or ETF is similar like a mutual fund investment, but they are traded on the stock exchange. An exchange-traded fund is a hybrid investment vehicle which amalgamates … [Read more...]