Roll no. 9100139. TY.

BMS A

Portfolio Management
1. Financial asset:
Financial Assets include cash and bank accounts plus securities and investment accounts that can be readily converted into cash. Excluded are illiquid physical assets such as real estate, automobiles, art, jewelry, furniture, collectibles, etc., which are included in calculations of Net Worth. Firms in the financial services industry typically use prefer to use Financial Assets to measure the wealth of an individual or a household, rather than Net Worth, when evaluating and categorizing clients, since this reflects what the client currently has to invest. Sales of illiquid assets, of course, can increase one's Financial Assets, while purchases of illiquid assets will decrease Financial Assets. However, loan officers at banks and other lending institutions often focus on Liquid Net Worth in making lending decisions, since this best reflects the applicant's ability to take on new debt. Also Known As: Investable Assets, Wealth

2. Real Assets

A real asset is a tangible asset like gold, oil, and real estate. It has intrinsic value due to its utility. Its value is derived by virtue of what it represents.

3. Post-office Time Deposit?

A Post-Office Time Deposit Account (RDA) is a banking service similar to a Bank Fixed Deposit offered by Department of post, Government of India at all post office counters in the country. The scheme is meant for those investors who want to deposit a lump sum of money for a fixed period; say for a minimum period of one year to two years, three years and a maximum period of five years. Investor gets a lump sum (principal + interest) at the maturity of the deposit. Time Deposits scheme return a lower, but safer, growth in investment.

4. Money market instruments

Certificate of deposit - Time deposit, commonly offered to consumers by banks, thrift institutions, and credit unions. Repurchase agreements - Short-term loansnormally for less than two weeks and frequently for one dayarranged by selling securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. Commercial paper - Unsecured promissory notes with a fixed maturity of one to 270 days; usually sold at a discount from face value. Eurodollar deposit - Deposits made in U.S. dollars at a bank or bank branch located outside the United States. Federal agency short-term securities. Federal funds. Municipal notes . Treasury bills - Short-term debt obligations of a national government that are issued to mature in three to twelve months. Money funds - Pooled short maturity, high quality investments which buy money market securities on behalf of retail or institutional investors. Foreign Exchange Swaps - Exchanging a set of currencies in spot date and the reversal of the exchange of currencies at a predetermined time in the future. Short-lived mortgage- and asset-backed securities

5. Commercial Paper.
Commercial paper is not usually backed by any form of collateral, so only firms with highquality debt ratings will easily find buyers without having to offer a substantial discount (higher cost) for the debt issue. A major benefit of commercial paper is that it does not need to be registered with the Securities and Exchange Commission (SEC) as long as it matures before nine months (270 days), making it a very cost-effective means of financing. The proceeds from this type of financing can only be used on current assets (inventories) and are not allowed to be used on fixed assets, such as a new plant, without SEC involvement.

6. Repo & reverse repo rate

A repo or repurchase Agreement is an instrument of money market. Usually reserve bank (federal bank in U.S) and commercial banks involve in repo transactions but not restricted to these two. Individuals, banks, financial institutes can also participate in repurchase agreement. Repo is a collateralized lending i.e. the banks which borrow money from Reserve Bank to meet short term needs have to sell securities, usually bonds to Reserve Bank with an agreement to repurchase the same at a predetermined rate and date. In this way for the lender of the cash (usually Reserve Bank) the securities sold by the borrower are the collateral against default risk and for the borrower of cash (usually commercial banks) cash received from the lender is the collateral. Reserve bank charges some interest rate on the cash borrowed by banks. This rate is usually less than the interest rate on bonds as the borrowing is collateral. This interest rate is called repo rate. The lender of securities is said to be doing repo whereas the lender of cash is said to be doing reverse repo. In a reverse repo Reserve Bank borrows money from banks by lending securities. The interest paid by Reserve Bank in this case is called reverse repo rate. Borrower of funds is called as seller of repo and lender of funds is called as buyer of repo. When the term of the loan is for one day it is known as an overnight repo and if it is for more than one day it is called a term repo. The forward clean price of bonds is set at a level which is different from the spot clean price by adjusting the difference between repo rate and coupon earned on the security.

7. Blue Chip Shares

A blue chip is stock in a corporation with a national reputation for quality, reliability and the ability to operate profitably in good times and bad. The most popular index which follows US blue chips is the Dow Jones Industrial Average. The Dow Jones Industrial Average is a priceweighted average of 30 blue-chip stocks that are generally the leaders in their industry. It has been a widely followed indicator of the stock market since October 1, 1928.

Speculative Stock.
Speculative stocks often have a high probability of declining in value and a low probability of experiencing above-average gains. Investors in these types of stock may be overly optimistic about the probability of earning above average gains, or the lure of the above average gains may

be enticing enough for them to make a purchase. Penny stocks are an example of a speculative stock.

8. 'Stalwart'
The annual gain that would be viewed as the norm for investing in stalwarts is about 10% to 12%. Stalwarts will by no means become tenbaggers overnight, mainly because of their large capitalization, but they are usually a good source of fairly predictable returns. Peter Lynch popularized this term in his book "One Up on Wall Street," where he shows that the price chart of a stalwart compares neither to a topographic map of Delaware nor to one of Mount Everest, but assumes a place somewhere in the middle.

'Cyclical Stock'
A stock that rises quickly when economic growth is strong and falls rapidly when growth is slowing down. An example is the automobile market: as economic growth slows, consumers have less money to spend on new cars. Non-cyclical stocks would be in industries such as healthcare, where the demand for goods and services is constant.

9. Futures & Options

Futures and options are derivative contracts that get their values from other securities or products. Futures and options are popular with traders for short-term trading and can be used as hedges by institutional money managers. There are distinct similarities and differences between futures and options.

10.Non-marketable financial analysis