Category: Financial Instruments

Money Market

Money markets are those markets where borrowing and lending of short term funds ( maturity 1 day to 1 year) takes place. Due to short maturity, the instruments of money market are liquid and can be converted to cash easily and thus are able to address.the need of the short term surplus fund of the […]

Certificate of Deposit

Certificate of Deposit (CD) refers to a money market instrument, which is negotiable and equivalent to a promissory note. It is either issued in demat form or in the form of a usance promissory note. This instruments is issue in lieu of the funds deposited at a bank for a specified time period. All scheduled […]

Commercial Paper

Commercial Paper (CP) is a money market instrument in India, which was first introduced in 1990 to enable the highly rated corporates to diversify their resources for short term fund requirements. They are issued either in the form of a promissory note or in a dematerialised form through any of the depositories approved by and […]

Treasury Bills

Treasury Bills are short term (up to one year) borrowing instruments of the Government of India which enable investors to park their short term surplus funds while reducing their market risk. Treasury Bills are basically instruments for short term (maturities less than one year) borrowing by the Central Government. Treasury Bills were first issued in […]

Industrial Securities Market

Securities market is a component of the wider financial market where securities can be.bought and sold between subjects of the economy, on the basis of demand and supply. Securities markets can be split into two levels. Primary markets, where new securities are issued and secondary markets where existing securities can be bought and sold. A […]

Mutual Fund

A mutual fund is a pool of money from numerous investors who wish to save or make money just like you. Investing in a mutual fund can be a lot easier than buying and selling individual stocks and bonds on your own. Investors can sell their shares when they want. There are many different types […]

Gilt-edged Market

The gilt-edged market refers to the market for government amd semi- government securities, backed by RBI. The term ‘gilt-edged’ means ‘of the best quality’. This is because the government securities do not suffer from risk of default and are highly liquid (as they can be easily sold in the market at their current price).

Global Depository Receipts

A global depository receipt ( GDR ), also known as international depository receipt (IDR) is a bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares, but are offered for sale globally through […]

Zero-Coupon Bond

A zero- coupon bond is a bond that makes no periodic interest payments and is sold at a deep discount from face value. The buyer of the bond receives a return by the gradual appreciation of the security, which is redeemed at face value on a specified maturity date. Zero coupon bonds may be long […]

Warrant

Warrant is A derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are frequently attached to bonds or preferred stock as a sweetener, allowing the issuer to pay lower interest rates or dividends. They can be used to […]

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