The most comprehensive educational resources for finance

Trade Settlement Dates: T+1, T+2, and T+3

When you buy or sell a stock, bond or any other financial instrument, there are two important dates, namely, transaction date and the settlement date. Transaction date, also known as the trade date, is the date on which the security is traded. On the other hand, settlement date is the date on which the trade

Money Demand and Money Market  Equilibrium

This video provide an overview of the concept of money demand and money market instruments. This video develops a graphical model of the money market. Money demand is a positive function of nominal income and a negative function of the interest rate. Money supply is determined by the central bank. In equilibrium, money demand and

Issue Price and Secondary Market Prices of CDs

CDs are issued as interest bearing instruments. For example suppose that South Bank, a natural borrower of six-month Australian dollars is contacted by a money broker, who says that a lender is willing to lend six month Australian dollars at 61/16 % or alternatively will buy paper at 6%. Primary Issue South Bank agrees to

Certificates of Deposit (CDs)

Certificates of deposit originated in the domestic US market (where they are directed primarily at the retail market). In the euromarket, however, CDs are very closely allied to interbank deposits. A CD is a record evidencing the placement of a deposit with the CD issuer for a stated period of and at a given rate

Video Lecture: Lunch with a Laureate – Robert Merton

As an MIT Museum audience peppers him with queries ranging from the barter system to development, trade relations, and the role of intuition in economics, Nobel Prize-winner Robert Merton pushes back against any assumptions that he might be a “renaissance man.” He carefully steers listeners to his areas of expertise – financial engineering and innovation, and risk management.

The Development of the Eurodollar Market

Due to the huge expansion in international trade from the early 1970’s, there was a huge growth in demand for foreign currencies to settle trade transactions. The availability of currencies for trading, and so the development of the FX markets itself, was facilitated by the development of the Eurodollar/Eurocurrency market. Eurocurrency is money deposited with

Why Gold Prices Fluctuate?

This is the first post in the learner’s series. A simple question that we will answer through this post is, “Why do gold prices fluctuate?”. While I am writing this article, the Gold price stands at $1238 per ounce (1 ounce = 28.35 grams). This fluctuate everyday, and the gold prices have gone significantly up