introduction to finance and accounts
Post on 02-Jun-2018
217 Views
Preview:
TRANSCRIPT
-
8/10/2019 Introduction to Finance and Accounts
1/110
-
8/10/2019 Introduction to Finance and Accounts
2/110
DISCLAIMER: While the document has attempted to make the information as accurate as possible, the information on this document is for personal and/or
educational use only and is provided in good faith without any express or implied warranty. There is no guarantee given as to the accuracy or currency of any
individual items. The document does not accept responsibility for any loss or damage occasioned by use of the information contained and acknowledgescredit of author(s) where ever due. While the document makes every effort to ensure the availability and integrity of its resources, it cannot guarantee that
these will always be available, and/or free of any defects, including viruses. Users should take this into account when accessing the resources. All access and
use is at the risk of the user and owner reserves that right to control or deny access.
Information, notes, models, graph etc. provided about subjects, topics, units, courses and any other similar arrangements for course/paper, are an expression
to facilitate ease of learning and dissemination of views/personal understanding and as such they are not to be taken as a firm offer or undertaking. The
document reserves the right to discontinue or vary such subjects, topic, units, courses, or arrangements at any time without notice and to impose limitations
on accessibility in any course.
Introduction to Finance and Accounts Notes, First Edition
Copyright 2013 Akshansh
ALL RIGHTS RESERVED.
Presented by: Akshansh Chaudhary
Graduate of BITS Pilani, Dubai Campus
Batch of 2011
Course content by: Dr. Aqila Raffiuddin
Then Faculty, BITS Pilani, Dubai Campus
Layout design by: AC Creations 2013
The course content was prepared during Fall, 2014.
More content available at:www.Akshansh.weebly.com
http://www.akshansh.weebly.com/http://www.akshansh.weebly.com/http://www.akshansh.weebly.com/http://www.akshansh.weebly.com/ -
8/10/2019 Introduction to Finance and Accounts
3/110
-
8/10/2019 Introduction to Finance and Accounts
4/110
-
8/10/2019 Introduction to Finance and Accounts
5/110
-
8/10/2019 Introduction to Finance and Accounts
6/110
-
8/10/2019 Introduction to Finance and Accounts
7/110
-
8/10/2019 Introduction to Finance and Accounts
8/110
-
8/10/2019 Introduction to Finance and Accounts
9/110
-
8/10/2019 Introduction to Finance and Accounts
10/110
-
8/10/2019 Introduction to Finance and Accounts
11/110
-
8/10/2019 Introduction to Finance and Accounts
12/110
-
8/10/2019 Introduction to Finance and Accounts
13/110
-
8/10/2019 Introduction to Finance and Accounts
14/110
-
8/10/2019 Introduction to Finance and Accounts
15/110
-
8/10/2019 Introduction to Finance and Accounts
16/110
-
8/10/2019 Introduction to Finance and Accounts
17/110
-
8/10/2019 Introduction to Finance and Accounts
18/110
-
8/10/2019 Introduction to Finance and Accounts
19/110
-
8/10/2019 Introduction to Finance and Accounts
20/110
-
8/10/2019 Introduction to Finance and Accounts
21/110
-
8/10/2019 Introduction to Finance and Accounts
22/110
-
8/10/2019 Introduction to Finance and Accounts
23/110
-
8/10/2019 Introduction to Finance and Accounts
24/110
-
8/10/2019 Introduction to Finance and Accounts
25/110
-
8/10/2019 Introduction to Finance and Accounts
26/110
-
8/10/2019 Introduction to Finance and Accounts
27/110
-
8/10/2019 Introduction to Finance and Accounts
28/110
-
8/10/2019 Introduction to Finance and Accounts
29/110
-
8/10/2019 Introduction to Finance and Accounts
30/110
Diversification:It relates to diversifying my ways of investing. I try to invest in a wide variety of options so that the negative effects of one may counterthe positive of the other. So, in the end, I dont face loss even if the market of one type collapses. I have reduced my risk.Further diversification benefits can be gained by investing in foreign securities because they tend be less closely correlated with domesticinvestments. For example, an economic downturn in the U.S. economy may not affect Japan's economy in the same way; therefore,having Japanese investments would allow an investor to have a small cushion of protection against losses due to an American economicdownturn.
-
8/10/2019 Introduction to Finance and Accounts
31/110
Types of RiskDefault Risk i.e., the risk for the borrower or debtor if the borrowed/lent money will be paid on time
r not.
Credit Risk i.e., the risk for the bank, if I take money from the bank, whether I will pay back or not.
ettlement Risk i.e., the risk for both the parties just in case the settlement of trade or anything doesnot take place as expected.
Financial Risk i.e., the risk that is there for the shareholders as they might lose their money, becausehe company on debt financing may not be able to repay its debt.
Liquidity Risk i.e., a risk that arises from the difficulty of selling an asset, considering the times whenn investment is required to be sold off quickly.
Maturity Risk i.e., the risk in making long term investments considering the market changes and Iannot predict that much.
Market risk (or Systematic Risk, or, Undiversifiable Risk) i.e., the risk that the value of my assetsmight change based on the factors that affect the entire market. Affects overall market, not a
articular stock or industry.or example, putting some assets in bonds and other assets in stocks can mitigate systematic risk because an interest rate shift that makesonds less valuable will tend to make stocks more valuable, and vice versa, thus limiting the overall change in the portfolios value fromystematic changes. Interest rate changes, inflation, recessions and wars all represent sources of systematic risk because they affect the entire
market. Systematic risk underlies all other investment risks.
Unsystematic risk (or specific risk, or diversifiable risk, or residual risk) i.e., the risk that is specifico a particular type of business, or does not affect everyone.xamples of unsystematic risk include a new competitor, a regulatory change, a management change and a product recall.
Operational Risk i.e., anything that can be a risk in doing the operations of a company successfully.Also includes legal risk, like failure to comply with laws.
nterest Rate Risk or Funding risk i.e., the risk on change in the value of my asset in case the interest
ate change.
nflation Risk i.e., the possibility that the value of assets or income will decrease as inflation shrinkshe purchasing power of a currency.
Exchange rate of currency riski.e., the risk when the exchange rate changes in internationalransactions, leading to cash variability
Country Risk i.e., the risk associated with investing in a foreign country.
Business Risk i.e., the risk on what will happen with the company based on all the internal andxternal factors of the business.
Total riskis the total variability in the return on the asset or the portfolio, It is the combination ofystematic and unsystematic risk.
-
8/10/2019 Introduction to Finance and Accounts
32/110
-
8/10/2019 Introduction to Finance and Accounts
33/110
-
8/10/2019 Introduction to Finance and Accounts
34/110
-
8/10/2019 Introduction to Finance and Accounts
35/110
-
8/10/2019 Introduction to Finance and Accounts
36/110
-
8/10/2019 Introduction to Finance and Accounts
37/110
-
8/10/2019 Introduction to Finance and Accounts
38/110
-
8/10/2019 Introduction to Finance and Accounts
39/110
-
8/10/2019 Introduction to Finance and Accounts
40/110
-
8/10/2019 Introduction to Finance and Accounts
41/110
-
8/10/2019 Introduction to Finance and Accounts
42/110
-
8/10/2019 Introduction to Finance and Accounts
43/110
-
8/10/2019 Introduction to Finance and Accounts
44/110
-
8/10/2019 Introduction to Finance and Accounts
45/110
-
8/10/2019 Introduction to Finance and Accounts
46/110
-
8/10/2019 Introduction to Finance and Accounts
47/110
-
8/10/2019 Introduction to Finance and Accounts
48/110
-
8/10/2019 Introduction to Finance and Accounts
49/110
-
8/10/2019 Introduction to Finance and Accounts
50/110
-
8/10/2019 Introduction to Finance and Accounts
51/110
-
8/10/2019 Introduction to Finance and Accounts
52/110
-
8/10/2019 Introduction to Finance and Accounts
53/110
-
8/10/2019 Introduction to Finance and Accounts
54/110
-
8/10/2019 Introduction to Finance and Accounts
55/110
-
8/10/2019 Introduction to Finance and Accounts
56/110
-
8/10/2019 Introduction to Finance and Accounts
57/110
-
8/10/2019 Introduction to Finance and Accounts
58/110
-
8/10/2019 Introduction to Finance and Accounts
59/110
-
8/10/2019 Introduction to Finance and Accounts
60/110
-
8/10/2019 Introduction to Finance and Accounts
61/110
-
8/10/2019 Introduction to Finance and Accounts
62/110
-
8/10/2019 Introduction to Finance and Accounts
63/110
-
8/10/2019 Introduction to Finance and Accounts
64/110
-
8/10/2019 Introduction to Finance and Accounts
65/110
-
8/10/2019 Introduction to Finance and Accounts
66/110
-
8/10/2019 Introduction to Finance and Accounts
67/110
-
8/10/2019 Introduction to Finance and Accounts
68/110
-
8/10/2019 Introduction to Finance and Accounts
69/110
-
8/10/2019 Introduction to Finance and Accounts
70/110
-
8/10/2019 Introduction to Finance and Accounts
71/110
-
8/10/2019 Introduction to Finance and Accounts
72/110
-
8/10/2019 Introduction to Finance and Accounts
73/110
-
8/10/2019 Introduction to Finance and Accounts
74/110
-
8/10/2019 Introduction to Finance and Accounts
75/110
-
8/10/2019 Introduction to Finance and Accounts
76/110
-
8/10/2019 Introduction to Finance and Accounts
77/110
-
8/10/2019 Introduction to Finance and Accounts
78/110
-
8/10/2019 Introduction to Finance and Accounts
79/110
-
8/10/2019 Introduction to Finance and Accounts
80/110
-
8/10/2019 Introduction to Finance and Accounts
81/110
-
8/10/2019 Introduction to Finance and Accounts
82/110
-
8/10/2019 Introduction to Finance and Accounts
83/110
-
8/10/2019 Introduction to Finance and Accounts
84/110
-
8/10/2019 Introduction to Finance and Accounts
85/110
-
8/10/2019 Introduction to Finance and Accounts
86/110
-
8/10/2019 Introduction to Finance and Accounts
87/110
-
8/10/2019 Introduction to Finance and Accounts
88/110
-
8/10/2019 Introduction to Finance and Accounts
89/110
-
8/10/2019 Introduction to Finance and Accounts
90/110
-
8/10/2019 Introduction to Finance and Accounts
91/110
-
8/10/2019 Introduction to Finance and Accounts
92/110
-
8/10/2019 Introduction to Finance and Accounts
93/110
-
8/10/2019 Introduction to Finance and Accounts
94/110
-
8/10/2019 Introduction to Finance and Accounts
95/110
-
8/10/2019 Introduction to Finance and Accounts
96/110
-
8/10/2019 Introduction to Finance and Accounts
97/110
-
8/10/2019 Introduction to Finance and Accounts
98/110
-
8/10/2019 Introduction to Finance and Accounts
99/110
-
8/10/2019 Introduction to Finance and Accounts
100/110
-
8/10/2019 Introduction to Finance and Accounts
101/110
-
8/10/2019 Introduction to Finance and Accounts
102/110
-
8/10/2019 Introduction to Finance and Accounts
103/110
-
8/10/2019 Introduction to Finance and Accounts
104/110
-
8/10/2019 Introduction to Finance and Accounts
105/110
-
8/10/2019 Introduction to Finance and Accounts
106/110
-
8/10/2019 Introduction to Finance and Accounts
107/110
-
8/10/2019 Introduction to Finance and Accounts
108/110
-
8/10/2019 Introduction to Finance and Accounts
109/110
-
8/10/2019 Introduction to Finance and Accounts
110/110
top related