CL 11 SEPT.pptx

CL 11 SEPT.pptx

• 1.
  WHAT IS INFLATION? •Inflation is a rise in prices, which can be translated as the decline of purchasing power over time. • The rate at which purchasing power drops can be reflected in the average price increase of a basket of selected goods and services over some period of time.
• 2.
  INTEREST • Interest isan amount charged to the borrower for the privilege of using. • Interest is usually calculated as a percentage of the principal balance(the amount of money borrowed).
• 3.
  FACTORS DETERMINE INTERESTRATES • Demand for money • Level of government borrowing • Supply of money • Inflation rate • RBI & Government policies.
• 4.
  SHORT-TERM FINANCIAL OPTIONS 1.Savings bank account, money market/liquid funds and fixed deposits with banks may be considered as short-term financial investment options: 2. Savings Bank Account is often the first banking product people use, which offers low interest (3%-4%p.a.), making them only marginally better than fixed deposits. 3. Money Market or Liquid Funds are a specialized form of mutual funds that invest in extremely short-term fixed income instruments and thereby provide easy liquidity. Unlike most mutual funds, money market funds are primarily oriented towards protecting your capital and then, aim to maximize returns. 1. FD’s
• 5.
  LONG TERM FINANCIALOPTIONS FOR INVESTMENTS • Public Provident Fund Account 1. Minimum deposit ₹ 500/- & Maximum deposit ₹ 1,50,000/- in a Financial year. 2. Loan facility is available from 3rd financial year upto 6th financial year. 3. Withdrawal is permissible every year from 7th financial year. 4. Account matures on completion of fifteen complete financial years from the end of the year in which the account was opened. 5. After maturity, account can be extended for any number for a block of 5 years with further deposits. 6. Account can be retained indefinitely without further deposit after maturity with the prevailing rate of interest.
• 6.
  POST OFFICE MONTHLYINCOME SCHEME • The lock-in period for Post Office MIS is 5 years. You can withdraw the invested amount when the scheme matures or reinvest it. • Minimum deposit amount: You can start with a nominal initial investment of Rs.1,000. As per your affordability, you can invest in multiples of this amount. • Guaranteed returns: You earn income in the form of interest every month. The returns are not inflation-beating but are higher compared to other fixed-income investments like FD. • You will receive the payout after one month from making the first investment, and not the beginning of every month. • Multiple account ownership: You can open more than one account in your name. But the total deposit amount cannot exceed Rs. 9 lakhs in all of them together. • Joint account: You can open a joint account with 2 or 3 people. In this case, an aggregate sum of up to Rs.15 lakhs can be invested in this account.
• 7.
  BONDS • A bondis a type of security under which the issuer (debtor) owes the holder (creditor) a debt, and is obliged – depending on the terms – to repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon) over a specified amount of time. • The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus, a bond is a form of loan
• 8.
  What Is aMutual Fund? A mutual fund is a financial vehicle that pools assets from shareholders to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors.
• 9.
  • EQUITY SHARES •Total equity capital of a company is divided into equal units of small denomination called as shares. • Holders of such shares are members of the company and have voting rights. • DERIVATIVES • A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. • The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. • Underlying assets can be equity, foreign exchange etc.
• 10.
  • SECURITIES MARKET •It is a place where buyers and sellers of securities cab enter into transaction to purchase the and sell shares, bond, debentures etc. • PRIMARY MARKET • Primary market forms part of the capital market, which is involved in issuing and selling of new securities. It may or may not be directly from corporates.
• 11.
  What is therole of the Primary Market? • The primary market provides the channel for sale of new securities. • Primary market provides opportunity to issuers of securities; Government as well as corporate, to raise resources to meet their requirements of investment and/or discharge some obligation. • They may issue the securities at face value, or at a discount/premium • They may issue the securities in domestic market and/or international market.
• 12.
  What is anInitial Public Offer (IPO)? • An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public.
• 13.
  PROSPECTUS • A prospectusis a legal disclosure document that provides information about a company • The prospectus contains information about the company, its management team, recent financial performance, and other related information that investors would like to know.
• 15.
  SECONDARY MARKET • Secondarymarket refers to a market where securities are traded after being initially offered to the public in the primary market on the stock exchange.