Why would a company distribute its earnings through dividends to common stockholders?

Correct Answer: Undergraduates may get this question as feelers of their business knowledge Insider trading describes the illegal activity of buying or selling stock based on information that is not public information This is to prevent those with privileged information (company execs, I-bankers and lawyers) from using this information to make a tremendous amount of money unfairly

Correct Answer: The term derivative indicates that it has no independent value that is its value is entirely derived from the values of the underlying assets The underlying asset can be securities, commodities , bullion, currency, livestock or anything else

Correct Answer: Demat means Dematerialisation of share, in simple it is an account with which a person can trade in security market without which a person cannot buy or sell any share in security market

Correct Answer: A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded The money market is used by participants as a means for borrowing and lending in the short term, from several days to just under a year Money market securities consist of negotiable certificates of deposit (CDs), bankers acceptances, US Treasury bills, commercial paper, municipal notes, federal funds and repurchase agreements (repos)

Correct Answer: Capital structure is a term which is referred to be the mix of sources from which the long term funds are required for business purposes which are raised to improve the capital of the company To fund an organization plan this capital structure is required which is the combination of debt and equity The management ensures the capital structure accesses which are needed to fund future growth and enhance financial performance The principles of capital structure management which are essentially required are as follows:- 1) Cost Principle 2) Risk Principle 3) Control Principle 4) Flexibility Principle 5) Timing Principle

Correct Answer: A journal is also called as a book of prime entryTransactions occurred are first entered in this book to show which accounts should be debited and which should be credited on the basis of entries made in the journal, accounts are prepared, the book which contains the accounts is called a ledger Transactions entered in the journal are classified according to their nature and posted in their respective accounts in ledger it is also called as book of final entry

Correct Answer: Nominal money relates more to it's measure of counting - so nominal figure of what is written on bill, while "real" relates more to it's purchasing power (usually between some periods of time) For instance 100 units in nominal could buy 2 units of good in 1950 and 1 unit of good in 2005, at the same time real value of this 100 nominal units are 100 real units in 1950 and 50 real units in 2005 Same is with GDP In nominal it can rise due to inflation while it can stay the same or even decrease in real value

Correct Answer: In economic terms, inflation is the rise in the prices of goods and services in the given economy over a period of time As the prices rise, each unit of the country's currency will buy fewer goods and services when the purchasing power of a currency go down then more money comes to the market it is called inflation

Correct Answer: The main difference lies in the motive of the two parties The main motive of the hedger is to hedge(minimize) the risk from the occurence of some events The motive of the speculator is to gamble in the market in order to make the profit by buying/selling the derivative products

Correct Answer: In business, a takeover is the purchase of one company by another