What is Financial Mathematics? Financial mathematics describes the application of mathematics and mathematical modeling to solve financial problems. it is sometimes referred to as quantitative finance, financial engineering, and computational finance. The discipline combines tools from statistics, probability, and stochastic processes and combines it with economic theory. Mathematics and Statistics Explained Mathematics is the discipline…
What is the Net Present Value Rule? The net present value rule is an investment concept stating that projects should only be engaged in if they demonstrate a positive net present value (NPV). Additionally, any project or investment with a negative net present value should not be undertaken. Understanding Net Present Value (NPV) Net Present…
What is an Amortizable Bond Premium? An amortizable bond premium refers to the excess amount paid for a bond over its face value or par value. Over time, the amount of premium is amortized until the bond reaches its maturity. What are Bonds? A bond is a type of fixed-income investment that represents a loan…
What is a Non-Banking Financial Company (NBFC)? A non-banking financial company, also known as non-banking financial institutions, are companies that offer financial services and products but are not officially recognized as a bank with a full banking license. Generally, the distinction between a recognized bank and a non-banking financial company is the fact…
What is the National Stock Exchange of India Limited (NSE)? The National Stock Exchange of India Limited (NSE) is the largest financial exchange in the Indian market. It was established in 1992 on the recommendation of the High-Powered Study Group, which was founded by the Indian government to provide solutions to simplify participation in the…
What is the National Securities Clearing Corporation (NSCC)? The National Securities Clearing Corporation (NSCC) provides risk management, settlement, and clearing services to the U.S securities exchange market. It acts as a central clearing counterparty (CCP) for trade in equities, foreign exchange, corporate debt, and other investments in the U.S. market. Founded as a…
What is a Vocational Degree? A vocational degree is a certificate from an academic institution that is awarded to students who have completed degree requirements for a specific field or trade. Vocational degrees are different than traditional degree programs, such as a bachelor’s degrees or master’s degrees. The former takes less time than the latter…
What is an Asset Management Company (AMC)? An asset management company (AMC) is a firm that invests a pooled fund of capital on behalf of its clients. The capital is used to fund different investments in various asset classes. Asset management companies are commonly referred to as money managers or money management firms as well….
What is Expected Value? Expected value (also known as EV, expectation, average, or mean value) is a long-run average value of random variables. It also indicates the probability-weighted average of all possible values. Expected value is a commonly used financial concept. In finance, it indicates the anticipated value of an investment in the future. By determining…
