How safe are Mutual Funds?
Investorline Just like any other financial instrument, mutual funds are not without risk. When defined in terms of chances of losing money, the risk in mutual funds is no different than…
What is a Mutual Fund?
A mutual fund collects money from various investors, and then invests this pool in various financial instruments. The fund managers attempt to generate returns superior than what the investors themselves…
How does one calculate the NAV and What does an NAV signify?
Net asset value on a particular date reflects the realisable value of a mutual fund’s portfolio in per share or per unit terms. It is the worth of an investment…
What advantages do mutual funds offer over equity stocks?
Here are a few considerations : Diversification : Most mutual funds spread the money over a number of shares depending on the fund size. This lowers the risk from an…
What is the difference between open-ended and close-ended schemes?
A mutual fund can be either open-ended or close-ended. The difference between the two is in the way each operates after the new fund offering. A close-ended scheme operates like…
Discounted cash flow
In finance, discounted cash flow (DCF) analysis is a method of valuing a project, company, or asset using the concepts of the time value of money. All future cash flows…
Weighted average cost of capital
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC…
Net present value
In finance, the net present value (NPV) or net present worth (NPW) of a time series of cash flows, both incoming and outgoing, is defined as the sum of the…
Modigliani–Miller theorem
The Modigliani–Miller theorem (of Franco Modigliani, Merton Miller) forms the basis for modern thinking on capital structure. The basic theorem states that, under a certain market price process (the classical…
Issues influencing Asset allocation
Volatility Investments vary in the extent of their potential losses or gains. Stocks are prone to greater rises and falls than would be experienced in cash deposit investments. The level…