World Of Finance

        World of Finance by M.Vijaya Sai Introduction: When Investment Centers have been established, these would be considered as autonomous units. They would be free to purchase their raw materials direct from the market or from their own departments. In case of the latter, there are many advantages like (i) it would be cheaper to buy from own departments, (ii) there would be more quality assurance and reliability. Also, it would be beneficial to the selling department because (i) there would no packing and external transportation costs, and (ii) there would be no bad debt. Why Transfer Pricing? Chief Executive of a big company cannot monitor and control operations of each and every sub-unit. So the sub-units are turned into Investment Centers and necessary authority is delegated to their managers.But in a decentralization, there are difficulties in evaluating the performance of the managers. Further, there is a problem of coordination. So a method is needed to asce

        World of Finance by M.Vijaya Sai Think twice before you act. Here I mean we all must plan well in hand before we spend.This could save our money,resources and energy.These savings can be used elsewhere when it is necessary. Doctors often say "Prevention is better than cure" same thing holds good with Financial planners "Precaution is better than a trap". Generally a middle class Indian spends a lot without proper planning thinking that he has enough resources but at the end of month he generally falls short of funds. Here we will see how we could save some of our expenditure and save more while shopping and day to day activities. 1. Visit the point of Salas and evaluate the alternatives in the product line. 2. Avail discount coupons on shopping. eg: Pantlooms gives discount coupons on every purchase for card holder. 3. Set a realistic budget aside and stick on to it during your shopping. 4. Budget planning directs and makes provision for your spendi

        World of Finance by M.Vijaya Sai You decide to start a business one fine day,you have estimated what you are going  to do according to your vision,mission and specific goals and action plans.even before all these creep in one of your first questions is likely to be how to raise money to finance your business operations. No matter how you plan to obtain financing for your business, you need to spend some time developing a business plan. Only then should you go forward with financing plans for even a simple small business. Equity as a source: You may have some cash you want to put into the business yourself, so that will be your initial base. Maybe you also have family or friends who are interested in your business idea and they would like to invest in your business. That may sound good on the surface to you, but even if this is the best arrangement for you, there are factors you must consider before you jump in. If you decide to accept investments from family and friends,

        World of Finance by M.Vijaya Sai Consider yourself first when it comes to saving money. Get yourself turned on to the idea that your financial future will be prosperous as a result of your efforts.Set aside 10% of your income, just for you. By that I mean set them aside on a savings account with higher interest rate then your normal account. What is important is that the money is out of reach. If you save them on an account where you have easy access, you will more easily spend them. Get them out of your life! Not in your pocket! You can also be well off saving in funds. Pick safe funds when you pick, do not go for high risk investment funds or you might end up resenting your saving plan. Be also careful with credit cards, as a consumer you are better of with no credit on your account. This does not mean that you should not use plastic cards. You can easy use a debit card that does not allow you to withdraw more than you have on your account. Let the planning of saving an

        World of Finance by M.Vijaya Sai What is an Option? An option is a contract to buy or sell a specific financial product officially known as the option's underlying instrument or underlying interest. For equity options, the underlying instrument is a stock, exchange-traded fund (ETF), or similar product. The contract itself is very precise. It establishes a specific price, called the strike price, at which the contract may be exercised, or acted on. And it has an expiration date. When an option expires, it no longer has value and no longer exists. Options come in two varieties, calls and puts, and you can buy or sell either type. You make those choices - whether to buy or sell and whether to choose a call or a put - based on what you want to achieve as an options investor. Buying and Selling If you buy a call, you have the right to buy the underlying instrument at the strike price on or before the expiration date. If you buy a put, you have the right to sell the underl

While the need for long term financing is met by the capital or financial markets , money market is a mechanism which deals with lending and borrowing of short term funds. Post reforms age in India has witnessed marvelous increase of the Indian money markets . Banks and other financial institutions have been able to meet the high opportunity of short term financial support of important sectors like the industry, services and agriculture. It performs under the regulation and control of the Reserve Bank of India (RBI). The Indian money markets have also exhibit the required maturity and flexibility over the past two decades. Decision of the government to permit the private sector banks to operate has provided much needed healthy competition in the money markets resulting in fair amount of improvement in their performance. Money markets denote inter-bank market where the banks borrow and lend between themselves to meet the short term credit and deposit needs of the economy. Short

        World of Finance by M.Vijaya Sai Credit risk is an investor's risk of loss arising from a borrower who does not make payments as promised. Such an event is called a default. Another term for credit risk is default risk. Investor losses include lost principal and interest, decreased cash flow, and increased collection costs, which arise in a number of circumstances: A consumer does not make a payment due on a mortgage loan, credit card, line of credit, or other loan. A business does not make a payment due on a mortgage, credit card, line of credit, or other loan A business or consumer does not pay a trade invoice when due A business does not pay an employee's earned wages when due A business or government bond issuer does not make a payment on a coupon or principal payment when due An insolvent insurance company does not pay a policy obligation An insolvent bank won't return funds to a depositor A government grants bankruptcy protection to an insolvent consumer