Finance Numericals

Hypothecation and Pledge both the terms are used in loan. If a company takes a loan the collateral security is given by borrower for security for payment. But there is a slight difference between Hypothecation and Pledge. Let's find out: Hypothecation: 1) It is a pledge ( formal agreement) a borrower give to lender against the loan. 2) In hypothecation the possession of collateral assets are not given to lender. The possession of assets are always in the hand of borrower. 3)  At the time of default of the loan payment the borrower has right to take the possession of assets to sell the assets to recover it's loan amount. 4)  In hypothecation two parties are involved Hypothecator ( borrower) and hypothecatee ( lender). 5) Hypothecation is registered under section 125 of Indian companies act 1956. Pledge: 1) It is a bailment which means possession of assets are transfer from the borrower to lender but it doesn't mean the ownership of assets are also transfer from the ...

Bond Portfolio Management Strategies: Bond is good investments for investors who are willing to investors want to earn extra gain through bond portfolio. For this there are 3 strategies for bond portfolio management. These are: 1)       Active strategies 2)       Passive strategies 3)       Matched strategies Active strategy: In this strategy investors not only invest money in bond portfolio but they also actively take some action to earn some extra money through bond by market fluctuations. There are various ways investor uses swap to outperform the market. Swap is an exchange of liabilities or cash to fulfil the needs. The types of swap use by investors are: ·          Tax swap: In this swap the bond sell at capital loss to offset the capital gain of other financial instrument. After some time purchases the similar bond portfolio. In this way investor red...