Financial Term Of The Day: “Index ETF”

  Index ETF:  Exchange-traded funds that follow a specific benchmark index as closely as possible. Index ETFs are much like index mutual funds, but whereas the mutual fund shares can only be redeemed at one price daily, the closing net asset value (NAV), index ETFs can be bought and sold throughout the day on exchanges. Through an [...]

Financial Term of the day- “Preferred Equity Redemption Stock - PERC”

 
PERC: Preferred stock with special provisions limiting the value of its convertible shares and the mandatory redemption value at maturity. PERCs generally offer a higher yield than common stocks. However, they can be called at any time, generally at a higher price than the cap price. When the PERC matures, it must be redeemed into [...]

Financial Term Of The Day- “Credit Score”

Credit Score:   A statistically derived numeric expression of a person’s creditworthiness that is used by lenders to access the likelihood that a person will repay his or her debts. A credit score is based [...]

Financial Term Of The Day- Joint Stock Company.

 Joint Stock Company:  An organization that falls between the definitions of a partnership and corporation. This type of company issues stock and allows for secondary market trading; however, stockholders are liable for company debts. This is a type of company that has access to the liquidity and financial reserves of stock markets, but also has [...]

Financial Term Of The Day-”Funding Gap”

Funding Gap:    The amount of money needed to fund the ongoing operations or future development of a business or project that is not currently provided by cash, equity or debt. Funding gaps can be covered by investment from venture capital or angel investors, equity sales, or through debt offerings and bank loans. Funding gaps are [...]

Financial Term Of The Day-”CAPEX”

  CAPEX (Capital Expenditure): 
Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. This type of outlay is made by companies to maintain or increase the scope of their operations. These expenditures can include everything from repairing a roof to building a brand new factory. The amount of capital expenditures a company is likely to [...]

Financial Term Of The Day-”Profit Margin”

 Profit Margin: A ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings.
Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that [...]

Financial Term Of The Day - “Know Your Client (KYC)”.

  Know Your Client: A standard form in the investment industry that ensures investment advisors know detailed information about their clients’ risk tolerance, investment knowledge and financial position. KYC forms protect both clients and investment advisors. Clients are protected by having their investment advisor know what investments best suit their personal situations. Investment advisors are [...]

Financial Term Of The Day- “Tax-Efficient Fund”.

Tax-Efficient Fund : A mutual fund in which structure and operations are based on reducing the tax liability that its shareholders face. Reducing the tax liability of a fund is done in three main ways:
1. By purchasing tax-free (or low taxed) investments such as
municipal bonds.
2. Keeping the fund’s turnover low, especially if the [...]

Financial Term Of The Day-”Retention Tax”

 Retention Tax : A mandatory tax placed on income that is earned on investments in a country that is not the investor’s home country. This only applies to countries that are members of the European Union (EU).

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