The Awesome Study Guide, Tips & Tricks To Make You A Financial Management (FM) Guru!
The BOMB of year 2013-14, FM is back again! Usually I follow the routine of introducing my subject first, but this subject cannot be introduced...
Financial Management
-
-
What is meant by ‘Financial management’. Explain its importance?
Financial management refers to that part of the management which is concerned with the efficient planning and controlling the financial affairs of the enterprise. Financial...
-
Why Debt is cheaper source of finance?
Debt is always cheaper source of finance because of following reasons. a) Tax benefit: The firm gets an income tax benefit on the interest component...
-
The Elements of Financial Engineering
– Embodies the notion that there are a few elemental building blocks or financial contracts that can be combined in a rigorous fashion to produce...
-
Financial Engineering
– Closely intertwined with the ideas and markets of derivative securities and risk hedging. – The nuts and bolts of designing a hybrid or exotic...
-
Exotics
– True derivatives, but formulated from combinations or mixtures of other types of derivatives. – They are tailored to the very specific risk exposures of...
-
Swaps
– Derivatives designed to allow hedging the risks of interest rate and foreign exchange-rate movements. – Where one party exchanges a stream of cash flow...
-
The Types of Derivatives
– Interest Rate: forward contracts, futures contracts, options, swaps. – Stock Market: futures contracts on market indexes, options on market indexes, options on individual securities....
-
Participation in Derivative Markets
– These should be careful control and oversight of those responsible for committing firms to positions in derivative markets. – Someone in the organisation should...
-
Applications of Option Valuation
– The equity of a firm with debt in its capital structure is actually a call option if interest and principal are paid to creditors,...
