The most comprehensive educational resources for finance

Preference Shares – Meaning, Types and Features

Preference shares are another type of equity securities issued by firms that combine the features of common shares as well as debt securities. Just like common shares, they do not mature, and can have features such as call and put options. However, like interest payments in debt securities, holders of preferred shares receive fixed payments

Common Equity Shares – Meaning and Features

Equity refers to the ownership interest or residual claim in the assets of a firm after all the liabilities of the firm have been paid. While referring to a firm’s balance sheet, equity refers to the capital contributed by the owners (also known as shareholders) plus any retained earnings or losses. A firm can issue

Operating Return on Assets (ROA)

Operating Return on Assets (ROA) is one of the important profitability ratios. Operating ROA is calculated just like Return on Assets but uses Earnings Before Interest and Taxes (EBIT) instead on Net Income. Operating return on assets indicates the company’s operating income generated per dollar invested in total assets. A higher operating RoA is preferred

How to Calculate Basic Earnings Per Share (EPS)

Earnings per share (EPS) is considered to be one of the best measures to summarize the performance of a company. The EPS for a company is reported only for common stock. A company can have simple capital structure or complex capital structure. A company with a simple capital structure can only have common stock, nonconvertible

Define and Compute a Commodity Spread

A spread position is one where trading takes places on many contracts on the same or related commodity. If the price between two related commodities changes then the idea is to profit from the opportunity. There are two main types of commodity spreads Inter-commodity spread – In this case a position is taken in two

How to Take the Long View With Your Investments

On any given day, the stock market could earn you a fortune or cost you your retirement. And then the next day, it could do the opposite. Short-term investing doesn’t make sense in today’s economy. That’s why it’s important to know how you can take a long view without making serious investment mistakes. Stop Worrying

Q1 Green Energy Investment Hits Lowest Levels Since 2009

Investment in green energy projects globally has hit its lowest figure in four years for the first quarter of 2013, according to a report in Bloomberg New Energy Finance. Investment across the first three months of 2013 was recorded at $40.6bn, down 38% from spend in the previous quarter. This decline marks a 22% drop

Constructing a Real Estate Price Index: The Moroccan Experience

The real estate sector became a centre of attention over the last few years, given the extent of its effects on financial and real spheres and its implications for monetary policy decisions and financial stability. In the absence of reliable indicators for the Moroccan properties prices, The Central Bank of Morocco and the Land Registry

Types of Commodity Investment Strategies

A portfolio manager can use several approaches to make commodity investments. There are three broad approaches: index fund, index-plus strategy, and active long-only strategy. Let’s look at each of these in details. Index Fund Strategy A commodity index fund is a fund that invests in financial products linked to a commodity index. Since investing directly

Exchange-Traded Funds, Market Structure and the Flash Crash

This reading is a part of the syllabus for FRM Part 2 Exam in the section ‘Current Issues in Financial Markets’. The “Flash Crash” of May 6, 2010 saw some stocks and exchange-traded funds traded at penniesonly to rapidly recover in price. We show that the impact of the Flash Crash across stocks is systematically