Investment Terms

Claims in Insurance and Claims Management

Claims in Insurance

Definition of claims: Claim is a right of insured to receive the amount secured under the policy of insurance contract promised by Insurer.

An insurance claim is the actual application for benefits provided by an insurance company. Policy holders must first file an insurance claim before any money can be disbursed to the hospital or repair shop or other contracted service. The insurance company may or may not approve the claim, based on their own assessment of the circumstances. Individuals who take out home, life, health, or automobile insurance policies must maintain regular payments called premiums to the insurers.… Read the rest

Abey Francis

Financial Derivative Types: Swaps

Swap is yet another exciting trading instrument. In fact, it is a combination of forwards by two counter-parties. It is arranged to reap the benefits arising from the fluctuation in the market — either currency market or interest rate market or any other market for that matter.

Features of Swap

The following are the important features of swap:

  • Basically a forward: A swap is nothing but a combination of forwards. So, it has all the properties of a forward contract discussed above.
  • Double coincidence of wants: Swap requires that two parties with equal and opposite needs must come into contact with each other.
… Read the rest
Abey Francis

Major Characteristics of Investments

Certain features characterize all investments. The following are the main characteristics of investments:

1.Return:  All investments are characterized by the expectation of a return. In fact, investments are made with the primary objective of deriving a return. The return may be received in the form of yield plus capital appreciation. The difference between the sale price & the purchase price is capital appreciation. The dividend or interest received from the investment is the yield. Different types of investments promise different rates of return. The return from an investment depends upon the nature of investment, the maturity period & a host of other factors.… Read the rest

Abey Francis

Definition of Investment and it’s basic classification

What is investment?

Investment is the activity, which is made with the objective of earning some sort of positive returns in the future. It is the commitment of the funds to earn future returns and it involves sacrificing the present investment for the future return. Every person makes the investment so that the funds he has increases as keeping cash with himself is not going to help as it will not generate any returns and also with the passage of time the time value of the money will come down. As the inflation will rise the purchasing power of the money will come down and this will result that the investor who does not invest will become more   poor as he will not have any funds whose value have been increased.… Read the rest

Abey Francis

Definition of Portfolio Management

Portfolio Management Definition

It is a process of encompassing many activities of investment in assets and securities. The portfolio management includes the planning, supervision, timing, rationalism and conservatism in the selection of securities to meet investor’s objectives. It is the process of selecting a list of securities that will provide the investor with a maximum yield constant with the risk he wishes to assume.

The portfolio management is growing rapidly serving broad array of investors — both individual and institutional — with investment portfolio ranging in asset size from few thousands to crores of rupees. Despite growing importance, the subject of portfolio and investment management is new in the country and is largely misunderstood.… Read the rest

Abey Francis

Financial and Economic Meaning of Investment

Investment is the employment of funds with the aim of getting return on it. In general terms, investment means the use of money in the hope of making more money. In finance, investment means the purchase of a financial product or other item of value with an expectation of favorable future returns. Investment of hard earned money is a crucial activity of every human being. Investment is the commitment of funds which have been saved from current consumption with the hope that some benefits will be received in future. Thus, it is a reward for waiting for money. Savings of the people are invested in assets depending on their risk and return demands.… Read the rest

Abey Francis