A commercial bill is also referred to as a bill of exchange or bill discounting. It is a short term, negotiable, and self-liquidating money market instrument. Bill discounting is a major activity with some of the smaller banks. Under this type of lending, the bank takes the bill drawn by the borrower on his (borrower's) customer and pays him immediately deducting some … [Read more...] about Commercial Bill: Features, Advantages and Disadvantages
Investment & Earning
9 Key Factors that Affecting Investment Decisions of Investors
Investing is parting with one's fund, to be sued by another party, user of a fund, or for productive activity. It means giving an advance or loan or contributing to the equity or debt capital of a corporate or non-corporate business unit. In ordinary everyday language, the term investment means the purchase of any income yielding asset, such as securities (stocks, mutual … [Read more...] about 9 Key Factors that Affecting Investment Decisions of Investors
Portfolio Revision: Meaning, Objectives, Need, Strategies, Constraints
In portfolio management, the maximum emphasis is placed on portfolio analysis and selection which leads to the construction of the optimal portfolio. Portfolio revision is important as portfolio analysis and selection. The financial markets are continually changing. In this dynamic environment, a portfolio that was optimal when constructed may not continue to be optimal … [Read more...] about Portfolio Revision: Meaning, Objectives, Need, Strategies, Constraints
Top 5 Risk Factors in Arbitrage Pricing Theory (APT)
The arbitrage pricing theory (APT) was developed primarily by Ross. It is a one-period model in which every investor believes that the stochastic properties of return of capital assets ate consistently with a factor structure. If equilibrium prices offer no arbitrage opportunities over the static portfolio of the assets, then the expected returns on the assets … [Read more...] about Top 5 Risk Factors in Arbitrage Pricing Theory (APT)
What is Capital Asset Pricing Model and It’s Assumptions
The CAPM model attempts to capture market behavior. It is simple in concept and has real-world applicability. The portfolio theory is really a description of how rational investors should build an efficient portfolio. Capital market theory tells us how assets should be priced in the capital markets if, indeed, everyone behaved in the way portfolio theory suggests. The … [Read more...] about What is Capital Asset Pricing Model and It’s Assumptions