Tag Archive | "financial markets"

Warrant: Introduction to Warrant

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In finance, warrant is a name given to a security that entitles the holder to buy stock of the company that issued it at a specified price, usually this price is higher than the stock price at time of issue.

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Frequently Warrants are  attached as a sweetener to bonds or preferred stock, by which the issuer is allowed to pay lower interest rates or dividends. Also in order to enhance the yield of the bond they can be used, and they make bonds more attractive to potential buyers. Moreover warrants can also be used in private equity deals. Frequently, these warrants are detachable, and they can be sold independently of the bond or stock.

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Exchange Rates: What do you understand by Exchange Rates?

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In finance, the exchange rates is also known as the foreign-exchange rate, forex rate or FX rate. Between two currencies it is specified by the exchange rates that how much one currency is worth in terms of the other. The value of a foreign nation’s currency in terms of the home nation’s currency is given by exchange rates. For instance an exchange rate of 95 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that the value of JPY 95 is the same as USD 1. One of the largest markets in the world is the foreign exchange market. According to an estimates, every day about 3.2 trillion USD worth of currency are exchanged.

Currency exchange board

the current exchange rate is referred to as the spot exchange rate. The forward exchange rate refers to such type of exchange rate that is quoted and traded today but its delivery and payment is agreed on a specific future date.

Free or pegged Exchange Rates

If a currency is free-floating, then its exchange rate is permitted to vary against that of other currencies and this exchange rate is determined by the market forces of supply and demand. For such currencies exchange rates are likely to change almost constantly as quoted on financial markets, mainly by banks, around the world.

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What do you Understand by the Term Dollar Hegemony?

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A term coined by Henry C.K. Liu to describe the US dollar in the global economy is Dollar hegemony;it is a form of monetary hegemony. The term was popularized by Liu in a widely circulated and quoted article "Dollar Hegemony has to go" in Asia Times on April 11, 2002. Then after that this article was quoted by William Clark in January 2003, Immanuel Wallerstein of the Fernand Braudel Center on June 1, 2003, Greg Moses, James Robertson in April 2004 and subsequently by many others.

 dollar hedemony

Definition

 

A geopolitical phenomenon of the 1990s is described by this term in which the U.S. dollar, a fiat currency, became the primary reserve currency internationally. Dollar hegemony has been allowed by three developments allowed to emerge over a span of two decades.

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