In the previous article on Bonds – Part 1, we discussed the basics of Bonds and some important terms related to bonds. We also mentioned… Read More »Returns and Risks involved in Bonds – Part 2
In one of our previous articles on How a company raises capital, we discussed raising capital using two methods. One is equity and the other… Read More »What Are Bonds And What Happens When It Is Traded? – Part 1
In the previous article, we discussed the debt and equity instruments used to raise capital for a company. When the owner of the private company… Read More »What is IPO and different types of investors:
Commodities and its purpose: Commodities can be used for two purposes such as investment purpose and consumption purpose. Example of Investment purpose commodities are metals… Read More »Mean reverting price in commodities market
Let’s discuss what does Risk means. Risk is simply called uncertainty. For example, when you lend money to your friend and there is a risk when you are not sure about getting back since he lost his job recently.
Similarly, when you consider banking, their main business is to make people deposit in their bank and lend money to others. Credit risk arises due to uncertainty of collecting back the money from borrowers. Credit risk can be high when the credit quality of the borrower is low. Due to lower credit quality and non-repayment of borrowed loans, Banks can expect losses. These losses are calculated as Expected LossRead More »Credit Risk