Foreign exchange market and participants

Foreign exchange market is the market for various countries currencies. It is also known as Forex market. The participants in the forex market (foreign exchange market) buy, sell, exchange and speculate on currencies.
       Foreign exchange markets are made up of banks , commercial companies, central banks, investment management firms, hedge funds, and retail forex brokers and investors.
The participants in foreign exchange market are-

• Central banks
• Major Commercial banks
• Investment banks
• Corporations for international business transactions
• Hedge funds
• Speculators
• Pension and mutual funds
• Insurance companies
• Forex brokers

Factors affecting exchange rates:-
The following are some of the principal determinants of exchange rate between two countries.

1. Differentials in Inflation
2. Differentials in interest Rates
3. Current Account Deficits
4. Public Debt
5. Terms of trade
6. Political Stability and Economic Performance

Key points in forex or foreign exchange market are:-

1. In Forex market buying and selling is currencies, not goods and services.
2. In this market, buying of one currency is done by another currency.
3. Exchange rate is the rate at which one currency is exchanged with another currency. For example giving 70Rs to get one dollar.
4. Currencies appreciate and depreciate due to the market conditions. Appreciate is increase in the value of a currency and depreciate is decrease in the value of currency.

Loan Consortium or Loan Syndication

Loan Syndication is the process of involving a group of lenders to fund  various portions of loan for a single borrower.

Loan Syndication most often occurs when a borrower requires an amount too large for single lender to provide or when the loan is outside the scope of a lender's risk exposure levels.

Thus , multiple lender's form a syndicate to provide with the requested capital.

Loan Syndication is often used in corporate financing.

LIBOR

LIBOR is accronym of London interbank offered Rate.
 LIBOR is the interest rate at which banks borrow money from another bank for short-term loans globally.
It is the average interest rate at which major global banks borrow from one another.

 
Also see related posts:
MIBOR
DII's and FII's
Swaps
Types of derivatives 

MIBOR

MIBOR--Mumbai interbank offered Rate.
It is the rate of interest for interbank short-term loans. It is the interest rate charged by a lending bank to the borrower bank for short-term loans taken by the bank.
 Banks borrow and lend money in interbank market to maintain liquidity levels  also to fulfill statutory reserve requirements   like CRR, SLR laid down by Reserve Bank of India to banks.
 Calculation of MIBOR

• MIBOR is calculated by averaging the lending interest rates of major banks in India. It is the rate at which one bank lend money to another bank in a interbank market.

DII's and FII's

Foreign institutional investors (FII) are the investment funds investing in a country other than the country in which it is registered. For example investment by US mutual fund Company in UK company shares.
Domestic institutional investors(DII) are the  investors or investment fund invest in the own country where it is registered. For example US mutual fund investing in US companies.
DII's-  domestic institutional investors,FII's -Foreign institutional investors.
Following are the various institutional investors:-

• Hedge funds
• Mutual funds
• Pension funds
• Insurance companies

Institutional investors buys the various securities like equity shares, Debentures etc in companies.

Swaps

Dictionary meaning of swap is " to take part in exchange" or " to exchange one thing for another thing "

Swap is a Derivative instrument .It is one of the different types of derivatives.

Swap is a contract to exchange cashflows between two parties at an agreed rate .
Swaps are financial instruments to exchange cash flows. Swaps are based on interest rates, stock indices, foreign currencies.

Common types of Swaps are

1. Interest rate swap
2. Currency swap
3. Credit default swap
4. Commodity swap
5. Equity swap

What are different types of derivatives

Derivatives are the investments that derives it's value from the underlying asset.
   Derivatives are risk reducing instruments. Derivatives are used in risk management.

Following are the different types of important derivatives :-

• Forwards
• Futures
• Options
• Swaps

Derivatives are made in three categories. They are commodities, Financial instruments, currencies

Various forms of business Organization

Transaction means

According to Cambridge dictionary, transaction means an occasion when someone buys or sells something, or when money is exchanged or the activity of buying or selling something:

a business Transaction (for more information click here)

         An Event which is measurable in monetary terms is known as Transaction in accounting.

Golden rules of Accounting

For SlideShare presentation click here .

In Accountancy, there are 3 types of Accounts.They are

• Personal Account
• Real Account
• Nominal Account

All transactions taking place in business are classified into above 3 three types of Accounts. Transactions falling under each type of account as to follow "golden rules of Accounting" to record transactions in the books of Accounts,which is to be debited and which is to be credited.

Following are the golden rules of Accounting:-
Personal Account:-
Debit the receiver
Credit the giver

Real Account:-
Debit what comes in
Credit what goes out

Nominal Account:-
Debit all expenses and losses
Credit all incomes and gains 

Golden rules of Accounting examples

Meta-analysis

What is a meta-analysis?

Meta-analysis is the statistical procedure for combining data from multiple studies. When the treatment effect (or effect size) is consistent from one study to the next, meta-analysis can be used to identify this common effect. When the effect varies from one study to the next, meta-analysis may be used to identify the reason for the variation.