A decrease from the purchase price to the selling price of common stock or any other
capital asset; a loss from the sale of investments or property
This is a all new blog for the Accountancy Students. We will discuss here accounting techniques. accounting concepts and conventions. We will also discuss about accounting softwares. If you are a qualified CFA, ACCA, CA, CIMA, MBA or other accounting body or a student of these levels comment on these posts.
What is Capital gain ?
An increase from the purchase price to the selling price of common stock or any other
capital asset; profit from the sale of investments or property .A capital gain that
persists for one year or less is called a short-term capital gain. Likewise, one that
persists for more than one year is called a long-term capital gain.
What is beta ?
The indicator used by Value Line to measure a stock's risk relative to the
market, in this case the NYSE Index. The market's beta is always 1.0 (Based on past
statistical records, a beta higher than 1.0 indicates that when the market rises, the
stock will rise to a greater extent than that of the market; likewise, when the market
falls, the stock will fall to a greater extent. A beta lower than 1.0 indicates that the
stock will usually change to a lesser extent than that of the market. The higher the beta,
the greater the investment risk.)
Government Securities
The Central Government and the State Governments issue securities periodically for the purpose of raising loans from the public. There are 2 main types of Government securities:
Dated Securities: have a maturity period of more than 1 year
Treasury Bills: have a maturity period of less than 1 year
Dated Securities: have a maturity period of more than 1 year
Treasury Bills: have a maturity period of less than 1 year
Equity shares
Equity shares represent proportionate ownership in a company. Investors who own equity shares in a company are entitled to ownership rights, such as:
Share in the profits of the company (in the form of dividends),
Share in the residual funds after liquidation / winding up of the company,
Selection of directors in the board, etc.
Share in the profits of the company (in the form of dividends),
Share in the residual funds after liquidation / winding up of the company,
Selection of directors in the board, etc.
Preference shares
Preferential shareholders enjoy a preferential right over equity shareholders with regards to ordinary shareholder.
Bonds
A bond is a debt investment with which the investor loans money to an entity (company or government) that borrows the funds for a defined period of time at a specified interest rate.
Debentures
A debenture is the most common form of long-term loan taken by a company. It is usually a loan repayable at a fixed date, although some debentures are irredeemable securities; these are sometimes called perpetual debentures. Most debentures also pay a fixed rate of interest, and this interest must be paid before a dividend is paid to shareholders
What are the different types of financial instruments?
The following are the different types of financial instruments-
Debentures
Bonds
Preference shares
Equity shares
Government securities
Debentures
Bonds
Preference shares
Equity shares
Government securities
Money Market
The money market is a subsection of the fixed income market. We generally think of the term "fixed income" as a synonym of bonds. In reality, a bond is just one type of fixed income security. The difference between the money market and the bond market is that the money market specializes in very short-term debt securities (debt that matures in less than one year). Money market investments are also called cash investments because of their short maturities. Money market securities are essentially IOUs (an abbreviation of the phrase "I owe you") issued by governments, financial institutions and large corporations. These instruments are very liquid and considered extraordinarily safe. Since they are extremely conservative, money market securities offer significantly lower returns than most of the other securities.
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