What Does Parity Price Mean? The Parity Price is the cost for a given commodity that is tied to a historical price or composite price.When the price of an asset is directly linked to another price.The term "parity" refers to equality. Examples of parity price are: 1. Convertibles - the price at which a convertible security equals the value of the underlying stock. 2. … [Read more...]
Reverse Convertible Note – RCN
A synthetic instrument that shares characteristics with both bonds and stocks. Reverse convertible notes typically provide high coupon payments and final payoffs that depend on the performance of an underlying stock.A security that combines aspects of a stock and a bond. An RCN operates like a debt security that pays a fixed coupon, which is usually higher than the coupons for … [Read more...]
EVA- Economic Value Added
All About EVA The Basic and the foremost goal of all companies is to create value for the shareholder. Eva helps in many companies is practised to achieve this target . What Is EVA? EVA is a performance metric that calculates the creation of shareholder value, but it distinguishes itself from traditional financial performance metrics such as net profit and earnings per … [Read more...]
Hedging in respect of Puts and Calls
Hedging With Puts And Calls In times of so much so of volatility and uncertainity in the market, some investors prefer turning their ways to hedging using puts and calls versus stock to reduce risk. Hedging can also be promoted by hedge funds, mutual funds, brokerage firms and some investment advisors. Hedging with puts and calls can also be done versus employee stock … [Read more...]
Does Dividend Really Matters?
What is a Dividend? Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many … [Read more...]