RBI and types of Money

The rupee is getting weaker against the dollar and RBI likely stepped in to sell dollars via state-run banks in early trade on Monday after the rupee opened weaker on global risk-off sentiment. The rupee is trading at 53.46.

In the mean time just thought of sharing some basics from RBI : –

Narrow Money (M1) This is a fortnightly compilation. It consists of:

  1. Currency notes and coins with the public (Excluding cash on hand of all banks). Continue reading “RBI and types of Money”

Mechanics of Time Value :

Some of my friends wanted to know more about the concepts and mechanics of time value, I have tried to put few examples along with it.

The process of discounting future cash flows converts them into cash flows in present value terms. Conversely, the process of compounding converts present cash flows into future cash flows. 

Time Value Principle 1: Cash flows at different points in time cannot be compared and aggregated (i.e. added). All cash flows have to be brought to the same point Continue reading “Mechanics of Time Value :”

Structured Products Complexity & Greed

With the continuation of my last post  some book rules for investments  trying to reveal some of the structured products offered in the open economies of world amaze to see that more than 10 billions of structured products are sold every year :

  • Reverse convertibles : They are unsecured short-term notes that are linked to the price of an underlying stock (typically not the stock of the issuer). The security comes with a high coupon rate (from 7 to as much as 25 percent). At maturity, the investor will receive the interest payment plus either 100 percent of his original investment amount or a predetermined number of shares of the underlying stock.

Financial Jargon’s Simplified :- Hats off to Dravid

I would like to dedicate today’s post to Rahul Dravid but the time is constraint will write for him soon :- I just don’t like  that  he is retiring, and people are talking about Sachin tendulkar! The Tragedy of his Life.  Few more thing for him If Sachin Tendulkar was the Best thing to happen to Indian Cricket :Rahul Dravid was the Best thing to happen to Sachin tendulkar. ( I think that describes all for him)

The post is  for my juniors, who wanted to have few jargon’s simplifications here you go :-

LEASE -BACK  :  Its an arrangement under which a company, in order to raise cash, sells a piece of equipment, ‘ land, or building on condition. that the buyer will lease it back to the seller for an agreed rental for a fixed term.

LEVERAGED BUYOUT : Taking over a company, using borrowed funds.

LEVERAGED COMPANY : If a company with borrowed funds in its capital structure. if the debt component is more than a third of the capitalization it’s called a highly leveraged company. Continue reading “Financial Jargon’s Simplified :- Hats off to Dravid”