Topic: Financial Markets

Rights Issue of Shares

Rights issue is yet another way using which companies raise additional capital from the public. In a rights issue, the company offering these rights gives its existing shareholders a right to buy new shares of the company at a discount from its current market price at...

What is Shelf Registration?

Shelf registration, also known as shelf offering, is a type of public offering in which a company can use a single prospectus to issue seasoned securities to the public multiple times over a period of many years. The company does not have to have a separate prospectus...

What is a Seasoned Security?

When a new stock or a financial instrument is newly issued and starts trading in the secondary market, its price may exhibit substantial volatility in the initial period after which the short-term effects would settle down and the price will become more stable. Once...

Using Pricing Models for Financial Products

Pricing models can either be purchased from vendors or developed internally, and they can be mainframe- or PC-based. Internally developed models are either built from scratch or developed using existing customized models that traders modify and manipulate to...

Pricing of Illiquid Instruments and Transactions

Illiquid, non-traditional, and user-specific or customized transactions pose particular pricing challenges because independent third-party prices are generally unavailable. For illiquid products that are traded on organized exchanges, but for which trades occur...

Pricing of Liquid Instruments and Transactions

For transactions that trade on organized exchanges or in liquid over-the-counter (OTC) markets, market prices are relatively easy to determine. Trading positions are simply updated to reflect observable market prices obtained from either the exchange on which the...

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