A commodity index tracks the price movement of a group of commodities. Think of it as a snapshot of how these raw materials, like oil, gold, or corn, perform. This snapshot helps investors understand broader market trends.We understand that
Investment Options
Venture Capital: How It Works, How It Makes Money, Investment Horizon
What's it: Venture capital is capital invested in a new company, startup, or young company, in return for ownership. It is a form of private equity besides leveraged buyouts (LBOs), minority equity, and distressed investing. Venture
Going Private: Meaning, Reasons, Methods, Benefits
What's it: Going private is when a company's stock is no longer traded for the public. It is the opposite of going public, i.e., a company lists its shares on a stock exchange for trading by the public. And, when it is listed on the stock
Sovereign Wealth Funds: Purposes, Source of Funds, Top-10 Lists
What's it: Sovereign wealth funds (SWFs) is a state-owned investment fund. The allocation may be in real assets or in financial assets such as stocks, bonds, and real estate. It is a pooled investment vehicle in global financial markets plus
Cross-Border Listing: Meaning, Examples, Pros, and Cons
What's it: Cross-border listing is the listing of company shares in a country other than its origin. When a company lists its shares in two different countries, we call it a dual listing. Dual listings create arbitrage opportunities, as the same
Spot Market: Meaning, Features, Examples, Advantages
What's it: Spot market is a market in which trading takes place for immediate delivery. Examples of spot markets are the market for securities, commodities, and foreign exchange (forex).Ideally, delivery takes place a few seconds after completion
Option: Meaning, Characteristics, Types, How it Works, Examples
What's it: An option is the right to buy or sell a certain number of commodities, currencies, or securities on a specific date for a specified price. Traded options can be bought or sold at any time on any exchange, in contrast to traditional
Shadow Banking: Meaning, How It Works, Pros and Cons
What's it: Shadow banking is intermediary financial activities but is not subject to the banking system's regulatory oversight. They usually take other parts of the financial system, which commercial banks are neither allowed nor willing to
Bear Market: Causes, and Investing Strategies
What's it: A bear market refers to a capital market experiencing a period of decline in performance. Bear is a term applied to an investor who is pessimistic about a particular security price prospect. Such a downturn in the market we call
Sovereign Risk: Meaning, Indicators, How It is Measured
What's it: Sovereign risk is credit risk attached to the sovereign debt where the government in a country will not pay its debt. It may be because the government doesn't have the ability or will to do so. Long story short, it is the default risk on
Financial Services Industry: Structure and Importance
The financial services industry refers to various institutions that facilitate the transfer of funds between savers and spenders. Examples are banks, insurance companies, pension funds, and securities companies.Savers have some money to invest in
Financial System: Its Role, Functions, and Characteristics When It Works Effectively
When we talk about the financial system, we refer to the institutions and other elements involved in circulating funds in the economy. The system includes financial institutions such as banks, pension funds, and insurance companies. Meanwhile, other