Not exactly...
The mark to market is done within the margin account. The investor is free to take out excess over and above the maintenance margin anytime. On expiry, margin balance (if any) would belong to the investor.
sankethingne Sayson expiry the initial margin is returned by the exchange to the trader.
Not exactly...
The mark to market is done within the margin account. The investor is free to take out excess over and above the maintenance margin anytime. On expiry, margin balance (if any) would belong to the investor.
Not theoretically possible, not practical.
sankethingne Saysya correct that is also a screnario. i was telling from the base scenario that if the trader stays in the contract throughout the without withdrawing anything then the exchange would return the intial margin
pallavi70
I didn't know but it seems after browsing their website they are trying to leverage the popularity of financial certifications like CFA & CFP, i dont know whether they have any kind of authorization from these institutions to use their certification name in their programs or its a kind coaching they are offering.
MBA plus = MBA from UGC recognised University
plus
Post Graduate Diploma in Financial Planning and
Wealth Management (PGDWM) that incorporates
curriculum of globally recognized CFPCM Certification.
Its a strategy to offer a freebie (PGDWM) tagged with CFPCM Certification, as well as it will save their time and effort on course preparation.
from their website: MBA offers an introduction to business and limited theoretical knowledge in finance, while CFA provides the tools and skills to develop creative solutions to complex financial problems.
Points to be noted -
> I have never heard of creative solutions to complex problems, this creative word is quite unprofessional to core finance fields.
> Any Masters Degree/PG isn't just about introductions and limited knowledge, it may be what they might offer in their MBA.
Over all its not advisable to pursue any courses from such kind of institutions.
VarunA
Do somebody knows about the MBA plus course from IIFP??
below is the link
Insurance and Investment Training, Certification Examination Training Programme, Best MBA in India, TOP MBA college, Full Time MBA course, PGDM, Executive MBA, MBA finance, MBA in marketing, MBA HR, MBA in india, MBA in Delhi NCR, UGC recognized MBA,
please let me know if anybody has any idea about it!!
Guys
in capital budgeting
IRR vs NPV which is better and why ?
Guys
in capital budgeting
IRR vs NPV which is better and why ?
IRR uses a single discount rate typically to analyze the project
NPV uses more than one discount rate in its calculations
So when there is certainty in cash flows , time period and risk elements are predictable ..its better to use an IRR method , however in practical scenarios discount rate changes a lot , hence NPV is very useful in high uncertainty scenarios
IRR is more simplified and easy to use
iwantgovtjob Saysplz explain with an example
hie , what are the roles in finance which are generally offered to fresher engineers ??
rahuldude Sayshie , what are the roles in finance which are generally offered to fresher engineers ??
Let say you want to check/ find returns on an investment in a project for a 5 year horizon
After considering opportunity cost (Could be a Govt Bond return) + risk premium you reach a figure of X%
Now you feel that in a time period of 5 years ,risk premium would remain similar and opportunity cost would also wont change much then you can use the IRR method
But if the opportunity cost varies and there is high uncertainty in future so the risk premium would vary too, in this scenario NPV is better
PS: Do correct if i am wrong ..
Guys
in capital budgeting
IRR vs NPV which is better and why ?
Can we then conclude that in case of Non conventional investments NPV is better and in Conventional investments IRR = NPV?
Yaar koi solid anser batao NPV vs IRR ka :nono:
Let say you want to check/ find returns on an investment in a project for a 5 year horizon
After considering opportunity cost (Could be a Govt Bond return) + risk premium you reach a figure of X%
Now you feel that in a time period of 5 years ,risk premium would remain similar and opportunity cost would also wont change much then you can use the IRR method
But if the opportunity cost varies and there is high uncertainty in future so the risk premium would vary too, in this scenario NPV is better
PS: Do correct if i am wrong ..
Should cost of retained earning =Ke
Yes or no and why 😃
Should cost of retained earning =Ke
Yes or no and why :)
Hello to Every one in the Thread ....
Very happy to See a thread exclusively for FINANCE. I am CHartered Accountant working in Tata Steel as Finance Manager. Have appeared for CFA level 1. Awaiting results. Also preparing for CAT 12.
Hope can provide good inputs in the thread as well as get back .
Thanks !!!!!!!!
NPV & IRR both the methods take a diff outlook towards evaluation of projects while NPV will give u the number which will bring u to a Break even level(No Profit-No Loss) Level, IRR gives you the minimum rate of return reqd for a project.
NPV method is generally easier to calculate then IRR. Also there is an underlying assumption in IRR which brings it on second footing,i.e, it assumes that the returns generated in the project shall be reinvested at the IRR whereas NPV method assumes that returns generated shall be reinvested at the cost of capital (which appears to be logical also).
Both the mehods generally give the same results but in case there is a conflict between the two the result of NPV is preferred over the IRR as NPV is more tied to value creation to the investor than IRR.
Hope that helps!!!!!!
Anyone having any idea of Global Financial crisis..? like why did it happen or when did it happen and for reason did it happen or is there any way we could stop it ?
vishal das SaysAnyone having any idea of Global Financial crisis..? like why did it happen or when did it happen and for reason did it happen or is there any way we could stop it ?
Financial Instability is it a curse or a boom? Is it like that reality check which we need to bring us back to the path of inclusive growth and development or is it a result of Greed and No fear, is it the outcome of politics , or is the side effect of "Globalization". Everyone has a different opinion on this, yet no one seems to have a solution.
History of Recession
If we look at history, World Economy has been in and out of recession since the great depression in US of 1930's, but the aftermath of these incidents did not cause a domino effect across the world, why so may be lack of economic integration or globalization. That needs to be seen After 1930's U.S didn't see another recession for next 40 years; probable reasons were: tightly regulated financial markets and prohibition of speculation of public deposits by banks. During period of 1980-90s there was a huge boom in the financial industry in US and this period saw the deregulation of banks and hence allowed these banks to invest in risky assets with the public deposits. The banks grew and became bigger and bigger, some said "Too big to fall", but by 2001 the investment banks fell and caused the investment loss of $5trillion, reason cited lack of regulation. But who started the de-regulation process the government itself. And we saw the "IT Bubble Burst", the investment banks sold millions or billions dollars worth of financial instruments (Stocks, Bonds) to general public, telling them that these companies were great investment opportunities , and funnily all these stocks or bonds were rate atleast AA if not AAA
The Last Recession
During the 1990s, the deregulation of the financial sector lead to birth of complex financial instruments called "Derivatives". Derivatives were called the product of Financial Innovation which made markets "Safer". Some of the lobbyists in the US government and Senate, helped in complete de-regulation of derivatives, getting a bill passed to completely ban regulation of derivatives
The Investment Banks such as Goldman Sachs, Morgan Stanley, and Banks such as Citigroup, JP Morgan, and Insurance companies such as AIG; together produced the first financial weapon of mass financial and economic destruction and the chief reason for 2008 Global Meltdown "Collaterized Debt Obligations". Now the banks could pass on their credit risks to general public, by dividing these loans into tranches and getting them rated AAA or AA and selling them to investors who thought they were buying AAA rated securities called "Pass through Certificates". After securitization of these loans banks became complacent, they no longer needed to follow up with the borrowers for repayment, they were now interested in selling of these loans since they were insured by agencies such as AIG. AIG was selling credit default swaps. The credit default swaps acted as insurance for investors investing in CDOs, so if the CDOs defaulted, the AIG would pay the investors the compensating balance in exchange of a regular premium the investors paid for the insurance just like we pay for life insurance in India. These credit default swaps could be traded in the secondary market and one could bet on a CDOs getting defaulted. And funnily enough banks started speculating against CDOs which were created on the loans given by the banks at the first instance, meaning banks were now betting on their own loans getting defaulted and were making millions. So when these CDOs actually defaulted, AIG had to pay to the speculators and the investors. The resultant was a massive fall not only of AIG but the entire financial industry. We saw the bankruptcy of AIG, collapse of Lehman brothers and many others. And we saw a major bail out of $700 Billion Dollars for the major banks and financial institutions in US. The investors who had invested in these CDOs across the world lost millions and billions of dollars. More than 15 million people lost their jobs during the time period of 2008-2009. The bail out money given to these defaulted banks were used for distributing bonuses to their employees..
The Present and the Future
From History we have understood that politics and economics go hand in hand. The de-regulation and bail outs has caused more financial harm to common people than one can ever imagine
Present is no different, after S&P; downgraded U.S credit rating, there has been a domino effect of negative economic reality across the world, even impacting the ever-growing emerging markets of India and China. The US $14 trillion dollar debt problem off course is a big problem but why is it that this ticking time bomb was not observed earlier. This happened after a disagreement on increasing the debt ceiling in between the Obama Administration and the Congress (mostly controlled by Republicans)
Eventually the debt ceiling was raised by $900 billion, which was subject to substantial debt reduction a few months hence. However the horse was already bolted and S&P; had downgraded US bonds to AA+. Later it admitted an error of $2 trillion in projecting US debt a decade hence and which lead to the resignation of Mr Deven Sharma the then S&P; president under suspicious circumstances.
The Possible Solutions can be to either increase tax or decrease government spending. By decreasing spending will result into decreased consumption hence will negatively impact the economy, similarly increasing taxes would also lead to a decrease in consumption. A probable solution is again growth, growth will lead to more jobs, higher productivity, can help government reduce spending, increase taxes. But it is again not as easy as it seems, creating jobs in an economy which is highly dependent on imports from China and outsourcing around the world will not be easy. President Obama on 7th September 2011 introduced, a $300billion plan, this plan included tax cuts and spending for2012 to boost job creation and stimulate recovery
The final say on these plans is yet to come. Hope these policy changes are effective in bringing a much needed change in the US economy
How About Europe?
The Sovereign Debt Crisis in Europe due to countries like Greece and Ireland has shaken the entire EuroZone and questioned the efficiency of it functioning altogether and it has been further blown out of proportion after downgrading of Italy, Spain
In countries around the world, the government controls both fiscal and monetary policy, and hence can always print enough currency to pay its debts. But in Economic integration of Eurozone, 17 European countries had given up their currencies in favour of the "Euro", the economic policies of these countries is now managed by the European Central Bank.
Under a Non EuroZone scenario Greece could have devalued its currency and solved the some of the financial troubles it finds itself now. But today Greece can no longer do that so it's unable to repay its debts. People of Germany, Holland and the Northern European countries are increasingly resentful of being asked time and again to bail out their Southern Counterparts
Probable option for countries like Greece, Portugal, Ireland and other weak Europeans countries can be to abandon the euro and revert to their old currencies after massive devaluation while marinating themselves as a part of European Union just like Britain
Is Greece the Culprit?
According to Maastricht Treaty which is also termed as the pillar structure of the European Union, any EU nation is liable to hefty fines if its debt exceeds 60% limit of the GDP or the budget deficit exceeds the limit of 3% with respect to GDP.
Greece never managed to abide the 60% debt limit but only followed the 3% budget deficit ceiling with the help of some very shrewd and creative accounting. Some of the examples were hiding of military expenditures, health care benefits provided to citizens etc. This was all managed by an instrument called cross currency swaps, which allowed the Greece government to swap its loans in dollars to Euro and after a certain amount of time they were swapped back to the dollars.
But what seems a regular refinancing activity followed by many countries across the world was a trick by a US bank which devised a special purpose swap based on fictional exchange rates, enabling Greece to generate higher amount of debt from the foreign markets than the actual exchange rate of Euro, for example if Greece issued 10 billion worth of bonds, they were issued at a higher exchange rate so that they could actually borrow 11-12 billion worth of capital from the foreign markets. This extra capital borrowed helped Greece reduce its deficit and peg it to 3% mark, however it had crossed the limit of 3% in 2004 and currently its deficit lies around 5.2% of the GDP. And since the maturity of these bonds is dated around 2015, so it will technically impact the deficit only by then. Not forgetting to mention US bank which helped Greek government to achieve this were paid a hefty amount of commission or fees for their service. The bank was none other than Goldman Sachs
What Now?
There are two sides of the story, what if Greece defaults or what if it is bailed out. If Greece does default, a double dip recession is a very likely scenario. Greece will need to move out of EuroZone but can still remain a permanent member of the European Union, like United Kingdom. The move of out EuroZone might just be a blessing in disguise for Greece, as European Central Bank will now no longer supply Greece with Euros and it will be force to start printing drachmas once more. Greece might be able to devalue its currency and also could try and control its fiscal and monetary policy and to stimulate the much needed economic growth in country.
The cost of default would be huge and detrimental to the entire world. During the last recession US Government bailed out all the major banks and insurance companies but didn't bail out Lehman brothers considering it as a non Banking financial institution having lesser impact over the global economy. We all know what happened, there was a global crash and Bankruptcy of Lehman brothers acted as the final nail in the coffin. The consequences of a Greek default can be horrendous; it can range of upto 50% of their GDP, which may mean massive losses for banks in the EuroZone holding Greek bonds. The entire financial market may just freeze all together, the market will lose faith in all the countries in trouble and that includes countries like Spain, Italy, Portugal , Ireland and many more . The US and Japanese economy who are also heavily invested in Euro Bonds will suffer badly.
Some of the biggest banks in Europe have invested in Greek bonds, French banks such BNP Paribas and Societe General have billions of dollars worth of investments in these bonds, so they are needed to be bailed out by their government or in the worst case scenario banks might be nationalized meaning millions of investors such as stockholders may lose their investments forever. This might be followed in other countries too such as Italy and Spain
This may also lead to consolidated EuroZone where only the fittest would survive, countries such as Greece, Portugal, and Ireland may all leave EuroZone and it will be left with countries only with stronger economies.
Can the bailout plan work?
Recently Germany passed a $590 billion bailout fund to help Greece and other countries such as Portugal, Ireland. And increasingly the bailout plan has got approval from 14 of 17 EuroZone nations
But people also agree that this bailout might only solve the near term financial problems but in the longer term Greece will remain on a similar spot and would need more bailouts in near future. Many fear as much as 50% haircut (part of the face value) for the investors in Greek bonds.
How will it affect India?
There might be impact on exports and FDI which may dry up comparatively to previous few years. If there is a serious recession, the government may consider a fiscal stimulus. The recession may push global prices down and reduce the inflation problem, so it might help the RBI which is trying to control the inflation so far unsuccessfully by loosening the monetary policy.
Comparatively Higher Savings rate, high Foreign Exchange reserves and a low current account deficit may mean it can survive a double-dip recession.
However exports will be impacted, so will be the GDP growth, but India should be able to cope with recession, as it did in 2008-09.
Guys
any way to remember ratio analysis formulas for long time.
Its difficult to remember them after some time 
Guys
any way to remember ratio analysis formulas for long time.
Its difficult to remember them after some time :sneaky: