LEARNING OBJECTIVES
Financial instruments innovation has been a continuous and integral part of growth of the capital markets. A variety of factors such as fluctuation in interest rate, volatility in price, change in tax structures and regulatory changes etc. plays an important part in financial innovation. In finance, innovation involves adapting and improvising on existing products and concepts. Advances emerge initially as either products (such as derivatives, high-yield corporate bonds, and mortgage-backed securities) or processes (such as pricing mechanisms, trading platforms, and means and methods for distributing securities). By moving funds or enabling investors to pool funds, these tools increase liquidity to facilitate the sale and purchase of goods or the management of risks in markets and enterprises. In general, it refers to the creating and marketing of new types of securities by the issuers for raising funds from the investor. A financial instrument is a combination of characteristics such as promised yield, liquidity, maturity period, security and risk. Keeping this in view this lesson is designed to enable the students to understand the various instruments available in the capital market, their features and classification etc.
LESSON OUTLINE
– Introduction
– Classification of Instruments
– Equity Shares
– Shares with Differential Voting Rights
– Preference Shares
– Debentures
– Sweat Equity Shares
– Secured Premium Notes
– Equity Shares with detachable warrants
– Dual Option Warrants
– Debt Instruments with Debt Warrants
– Debt for Equity Swap
– Different types of Bonds & Notes
– Global Depository Receipts
– Foreign Currency Convertible Bonds
– Indian Depository Receipts
– Tracking Stocks
– Mortgage Backed Securities
– Futures
– Options
– Hedge Funds
– Exchange Traded Funds
– Fund of Funds
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