Definition: Unit linked insurance plan (ULIP) is a bundled financial product proposed for those investors who need a life cover as well. It comprises of insurance benefit along with investment opportunity, to serve the dual purpose of safety and wealth maximization to the investors. ULIP was developed in India and is widely known for its tax-saving benefits among the … [Read more...] about Unit Linked Insurance Plan (ULIP)
Investment
Wealth Management
Definition: Wealth management is a complete financial assistance package designed for high net worth individuals (HNIs). A wealth manager aims at providing specialized and customized services by developing the most favourable strategy for the client. Wealth management amalgamates the investment portfolio management with other financial services like tax planning, insurance, … [Read more...] about Wealth Management
Value Investing
Definition: Value investing is a trading strategy that entails identifying the potential yet undervalued stocks and purchasing them at a reduced price after doing a thorough fundamental study to generate good returns over the long run. In simple terms, purchasing stocks of an underestimated company on sale or at a sensible price. This concept was introduced by … [Read more...] about Value Investing
High-yield Bonds
Definition: High-yield Bonds or Junk Bonds are publicly traded debt securities. It belongs to the noninvestment grade category in the credit rating list. It is a part of corporate finance which is risky but yields high returns, which is why it is named 'High-yield Bonds'. The securities rated below BBB (S&P) or Baa3 (Moody's) come under the noninvestment grade … [Read more...] about High-yield Bonds
Divestiture
Definition: Divestiture implies the strategic move taken by the business's management which involves discontinuation of a business unit either partially or fully by selling/separating a piece of asset, service, property or product line with the motive of being profitable and streamlining operations. Simply put, the management decides to cease the operations that cannot make … [Read more...] about Divestiture
Functions of Stock Exchange
The Functions of the Stock Exchange are not restricted to just trading but are a most extensive part of the economy. Therefore, it performs many functions which are crucial for Investors, Firms and the Economy as a whole. The main function of a stock exchange is to make trading easier by assisting sellers in finding qualified purchasers for their stocks or other … [Read more...] about Functions of Stock Exchange
Indirect Investing
Definition: The term "Indirect Investing" describes the process of investing money in a portfolio of bundled securities through an intermediary. In simple words, these are third-party investments made through intermediaries. Investors who resist investing directly in the stock market opt for this type of investing. They prefer investing in funds owned and managed by … [Read more...] about Indirect Investing
Investment Decision
Investment Decision is a part of Financial Management which deals with the allocation of the company's valuable funds into investment projects or potential assets. It involves identifying such projects or assets to invest in and generate returns from them. Besides, these decisions significantly affect the profitability and stability of the firm. Some essential … [Read more...] about Investment Decision
Capital Rationing
Definition: Capital rationing is a financial approach applied by the organizations to pick the utmost profitable projects out of all the investment opportunities available. It enables the organizations to determine an optimal capital budgeting and adequate capital expenditure, in the long run. This a useful practice since the organizations usually have limited availability … [Read more...] about Capital Rationing
Hedging
Definition: Hedging means limiting something by certain conditions in general terms; however, in financial terminology, hedging is a process of protecting oneself against any loss in investment, i.e., it is a method of using market instrument tactically to compensate any unfavourable movements of prices, or we can say the investor hedge one investment by hedging … [Read more...] about Hedging