What do you understand by Risk-free interest rate?
Investorline Risk-free interest rate is the theoretical rate of return of an investment with no risk of financial loss. The risk-free rate represents the interest that an investor would expect from…
What is Interest rate and reasons for its change?
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company…
Basis risk
Basis risk in finance is the risk associated with imperfect hedging using futures. It could arise because of the difference between the asset whose price is to be hedged and…
What is Hedge (finance), its examples and types?
A hedge is a financial term denoting an investment position intended to offset potential losses that may be incurred by a companion investment. Possible vehicles for a hedge investment include…
Gap financing
Gap Financing is a term mostly associated with mortgage loans or property loans. It is an interim loan given to finance the difference between the floor loan and the maximum…
Fixed income analysis
Fixed income analysis is the valuation of fixed income or debt securities, and the analysis of their interest rate risk, credit risk, and likely price behavior in hedging portfolios. The…
What is Financial modeling
Financial modeling is the task of building an abstract representation (a model) of a financial decision making situation.This is a mathematical model designed to represent (a simplified version of) the…
Accounting: Understanding Your Assets
Current assets are the key assets that your business uses up during a 12-month period and will likely not be there the next year. The accounts that reflect current &…
Business Owners: How To Keep Your Books Ready For The IRS
As a business owner, you should deposit all business receipts in a separate bank account. If possible, you should also make all disbursements by check. In regard to all business…
A Crash Course On Understanding Financial Statements
Businesses operate to achieve various goals. To meet these goals a business must achieve two primary objectives: To earn a satisfactory profit and to remain solvent (be able to pay…