What are the advantages of foreign portfolio investment?

July 8, 2024 No Comments

A: Foreign portfolio investment is the type of investment that an investor has abroad. There are many benefits of having a foreign portfolio investment. Portfolio Diversification Foreign portfolio investment gives investors an opportunity to engage in international diversification of portfolio assets, which in turn helps

What are the differences between debt and equity markets?

July 8, 2024 No Comments

A: The basic differences between the debt and equity markets include the type of financial interest they represent, the way in which they generate profits for investors, how they are traded and their respective risk levels. Both debt securities and equity investments have the potential

Is variance good or bad for stock investors?

July 8, 2024 No Comments

Variance is neither good nor bad for investors in and of itself. However, high variance in a stock is associated with higher risk, along with a higher return. Low variance is associated with lower risk and a lower return. High variance stocks tend to be

Par Value vs Face Value

July 8, 2024 No Comments

A: When referring to the value of financial instruments, there’s no difference between par value and face value. Both terms refer to the stated value of the financial instrument at the time it is issued. Breaking It Down The par value of a bond can

The difference between a bank guarantee and a bond

July 8, 2024 No Comments

A: A bank guarantee is a promise from a bank or lending institution that, if a borrower defaults on repayment of a loan, the bank will cover the loss. A bond is a debt instrument in which an investor loans money to a corporation or

The difference between fixed and current assets

July 8, 2024 No Comments

A: Fixed assets, also known as property, plant and equipment (PP&E), are tangible assets that a company expects to use for more than one accounting period. They are part of the non-current assets of an entity, and are different from cash and other current assets

The Differences Between a Collateralized Debt Obligation (CDO) and an Asset Backed Security (ABS)

July 8, 2024 No Comments

A: An asset-backed security (ABS) is a security created by pooling non-mortgage assets that is then resold to investors. A collateralized debt obligation (CDO) is a complex type of ABS that can be based on non-mortgage assets, mortgage assets or both together. Understanding the Differences

Treasury Bond vs Treasury Note vs Treasury Bill

July 8, 2024 No Comments

A: The U.S. federal government offers three categories of fixed income securities to the buying public: Treasury bonds (T-bonds), Treasury notes (T-notes) and Treasury bills (T-bills). Each of these securities is issued with the full faith and credit of the U.S. government, and they are used

Under what circumstances might an issuer redeem a callable bond?

July 8, 2024 No Comments

A: The primary circumstance under which a bond issuer redeems a callable bond is a drop in interest rates. When rates fall, it makes no sense for the bond issuer to continue paying higher-than-average interest to investors when a provision in the bond allows for

What are G7 bonds?

July 8, 2024 No Comments

A: G7 Bonds refer to bonds that are issued by the governments of the following seven countries: United States, Canada, France, Italy, United Kingdom, Germany and Japan. These bonds can be purchased on an individual bond basis or in the form of a group of

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