Author Archives: Gopika

What is Financial Derivatives? Financial derivatives are financial instruments that are linked to specificassets. By nature, these instruments are similar to contingent instruments Claimsand liabilities related to financial instrument will arise after a specific period of time. Derivative instruments are not considered a financial claim or liability for the holder thereof at the given moment.Continue reading “FINANCIAL DERIVATIVES”

What is Other Accounts Receivable or Payable? Accounts receivable/payable includes trade credits, advances and otherreceivables or payables. Trade credit means the suppliers of goods/services extend credit to the buyer/user. Advances are prepayments made for work which is in progress or for purchase of goods and services.

What is Loans and Borrowings? Loans are financial assets. This asset is created when a creditor (saver) lendsfunds directly to a debtor (borrower). There will be an evidence of a non-negotiable document for the creation of the asset. Loans can be classified further into short term loans, medium term loans and long term loans. ShortContinue reading “LOANS & BORROWINGS”

What is Shares other than Equity? Equity shares represent ownership rights of the holders or subscribers. Oncethe creditors’ liability is settled, what is remaining is up to the equity shareholdersto share. Participating preference share is also included in this category of sharesand other equity.

What is Securities other than shares? Securities other than shares are negotiable instruments in the financialmarket. These securities include government treasury bills, government bonds, corporate bonds/debentures, commercial paper, certificate of deposits, etc. These securities serve as an evidence that the issuer assumes the obligation to settle the issue by paying cash or in exchange ofContinue reading “SECURITIES OTHER THAN SHARES”

Classification on the basis of Structure of Market Financial markets may be classified into unorganised markets and organisedmarkets on the basis of structure. Unorganised Markets There are a number of moneylenders, indigenous bankers, local traders, etcwho lend money to the public and collect deposits from the public. There are alsprivate finance companies, chit funds, etc.,Continue reading “CLASSIFICATION OF FINANCIAL MARKETS”