Basic concepts of assessing trading strategies, Financial Management

  • Leveraging can be described as an investing principle where borrowed funds are invested in a part of the securities. Leveraging can magnify either returns or losses from an investment for a given change in the price of that security.

  • Repurchase agreement is a contract wherein the seller of a security agrees to buy back the same security from the purchaser at a specified price and time. It is also known as repo or buyback.  

  • Reverse repo is an agreement where a buyer purchases securities with an agreement to resell them at a specified price (which is higher than the buying price) on a specified date.

  • Mark to market is the process of recording the price or value of a security or portfolio on a daily basis, to calculate profits and losses. It also helps to confirm that margin requirements are being met.

  • Trade is assessed on the basis of its performance. Performance can be defined as the expected total return over and above the investment horizon of the trade. The returns would be from: coupon payment, the change in the value of the bond, and reinvestment income derived from reinvesting coupon payments and principal repayment.

  • The process of evaluating a strategy under several scenarios is called as scenario analysis.

  • Duration is the change in the value of bond that will result from a hundred basis point change in yield.

Posted Date: 9/11/2012 1:52:07 AM | Location : United States







Related Discussions:- Basic concepts of assessing trading strategies, Assignment Help, Ask Question on Basic concepts of assessing trading strategies, Get Answer, Expert's Help, Basic concepts of assessing trading strategies Discussions

Write discussion on Basic concepts of assessing trading strategies
Your posts are moderated
Related Questions
Bonds pay interest periodically at a pre-specified rate of interest. The annual rate at which this interest is paid is known as the coupon rate or simply the coup

Q. How to Select the pattern of the investment? When the funds have been procured than a decision about the investment pattern is to be taken. The selection of the investment p

What are the main elements of capital budgeting decisions There are three elements of capital budgeting decisions (i) long-term assets and their composition (ii) business

What are the Objectives or goals of Financial Management? Objectives of Financial Management: - It is the responsibility of the top management to lay down the objectives or goa

R eceipt of bids and bid opening We discussed how to prepare the bids and to publish them in the earlier sub section. Now let us see how to receive and open bids. To receiv

what is mean by breakeven point

What are the Material items are carried out Material items would have an impact on: Audit tests carried out. For illustration compliance based testing (relying on contro

What is the intuition of discounting the several cash flows in the APV model at fixed discount rates? The APV model is a value-additivity method where total value is defined by t

The zero-volatility spread is a measure of the spread that the investor would realize over the entire Treasury spot rate curve if a mortgage-backed or asset-backe

When a set of predetermined liabilities are given, the investor must construct a non-callable bond portfolio of homogeneous ratings by considering certain characteris