Finoledge

Factors for Selecting a Mutual Fund 1) Investment Objective Investment objective refers to an investor’s financial goal which he/she aims to accomplish with the mutual fund investment. The investment objective can be any short-term or long-term financial aspiration of the investor – buying a house/car, financing children’s higher education, going on a vacation, retirement, etc. 2) Time Horizon The time horizon refers to the period for which an investor wishes to keep his/her money invested in a mutual fund scheme. It can be either as short as 1 day or as long as more than 5 years. Different fund categories work best for different time horizons. This is because some funds invest in shorter-dated debt and others invest in longer-dated debt. Equity funds should ideally be chosen if the investment horizon is more than 5 years. 3) Risk tolerance Risk tolerance refers to the amount of risk an investor is willing to take with his/her invested money. SEBI in 2015 made it...

1. What are Stock Futures? Stock Futures are financial contracts where the underlying asset is an individual stock. Stock Future contract is an agreement to buy or sell a specified quantity of underlying equity share for a future date at a price agreed upon between the buyer and seller. The contracts have standardized specifications like a market lot, expiry day and unit of price quotation, tick size and method of settlement. 2. How are Stock Futures priced? The theoretical price of a futures contract is the sum of the current spot price and the cost of carrying. However, the actual price of futures contract very much depends upon the demand and supply of the underlying stock. Generally, the futures prices are higher than the spot prices of the underlying stocks. Futures Price = Spot Price + Cost of carrying The cost of carrying is the interest cost of a similar position in the cash market and carried to the maturity of the futures contract less any dividend expected ...