Equity vs Security Equity refers to a form of ownership held in a firm, either by investing capital or purchasing shares in the company. Securities, on the other hand, represent a broader set of financial assets such as bank notes, bonds, stocks, futures, forwards, options, swaps etc. Forms of equity such as stock also […]
Difference Between Equity and Debt Securities
Equity vs Debt Securities Any firm that is planning on starting up a new business or expanding into new business ventures requires adequate capital to do so. This is the point at which the company’s top managers are faced with a decision on their hands, as to whether they should go forward and obtain […]
Difference Between Expected Return and Required Return
Expected Return vs Required Return Individuals and organizations make investments with expectations of gaining the highest possible return. An investor who takes risk will expect to receive a rate of return that corresponds to the respective level of risk. Required rate of return and expected return represent the levels of return that is to […]
Difference Between Swap and Forward
Swap vs Forward Derivatives are special financial instruments that derive their value from one or more underlying assets. The changes in movements, in the values of the underlying assets, affect the manner in which the derivative is used. Derivatives are used for hedging and speculation purposes. The following article takes a closer look at […]
Difference Between Derivatives and Equity
Derivatives vs Equity Equity and derivatives are financial instruments that are quite different to each other. The main similarity between the two is that both equity and derivatives can be purchased and sold, and there are active equity and derivative markets for such trade. The article provides a clear overview of each concept and […]
Difference Between Collateral and Security
Collateral vs Security Collateral refers to any asset that is pledged to the bank by the borrower when taking out a loan; which the bank uses to recover losses in the event that the borrower defaults on his loan. Collateral can refer to any type of asset with value such as land, buildings (houses), […]
Difference Between FDI and Portfolio Investment
FDI vs Portfolio Investment FDI and portfolio investment are both forms of investments made with the aim of generating profits and higher returns. FDI, however, involves a large commitment, larger amount in funding, and cannot enter or leave the market as they please. Portfolio investments are passive investments made in securities in which the […]
Difference Between Cost Benefit and Cost Effectiveness
Cost Benefit vs Cost Effectiveness Cost benefit analysis and cost effective analysis are both tools used for decision making and help in evaluating a project/investment/course of action in terms of either their feasibility and profitability or value and effectiveness. Cost benefit and cost effectiveness also allow decision makers to compare alternatives and select the […]
Difference Between Capital Market Line (CML) and Security Market Line (SML)
Capital Market Line (CML) vs Security Market Line (SML) Modern portfolio theory explores the ways in which investors can built their investment portfolios in a way that minimizes risk levels and maximizes returns and profits. The Capital Asset Pricing Model (CAPM) is an important part of portfolio theory that discusses the capital market line […]
Difference Between Long-term and Short-term Financing
Long-term vs Short-term Financing Any firm that is planning on starting up a new business or expanding into new business ventures requires adequate capital to do so. This is the point at which the company’s top managers are faced with a decision on their hands, as to whether they should go forward and obtain […]
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