What is working capital? what is hedging?
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What is Working Capital?\nFirms need cash to pay for all their day-to-day activities. They have to pay wages, pay for raw materials, pay bills and so on. The money available to them to do this is known as the firms working capital. The main sources of working capital are the current assets as these are the short-term assets that the firm can use to generate cash. However, the firm also has current liabilities and so these have to be taken account of when working out how much working capital a firm has at its disposal.\n\nWorking capital is therefore:-\n\nWORKING CAPITAL = Current Assets - Current liabilities \n\nThus working capital is the same as net current assets, and is an important part of the top half of the firm's balance sheet. It is vital to a business to have sufficient working capital to meet all its requirements. Many businesses have gone under, not because they were unprofitable, but because they suffered from shortages of working capital.\n\nHedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market
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http://finance.yahoo.com/q/bc?s=GBPUSD=X&t=2y
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Resources and goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment. In the context of credit transactions, capital is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be as determined by the borrower's current financial assets and net worth.\n\nThis is the textbook definition of Capital, and it is representative of what I'd expect from a student of mine.  Good Luck!!
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100% financing. To minimize your risk in investments, try not to use as much of YOUR money as you can. Use the banks money to finance your investments.
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Financing is bringing money (usually cash) to the firm.  With a larger cash reserve, the company will have more liquid assets.\n\nThe firm could also take out a large revolver at a bank and this type of financing would help to ease the uneven cash flows for a cyclic industry and help increase liquidity.
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Sounds like textbook propaganda...  you're supposed to regurgitate the mush in paraphrased form straight from the text, right?\n\nFinance by \n1-borrowing (from individuals, other companies, banks, the gov, or foreign countries) (by issuing bonds, notes, etc)\n2-increasing investment (by issuing more stock, takin on additional partners, or depositing your own money into your business account)\n\nGoals and functions... yeah really bad wording.  I hate questions like this.  Some moron wrote your school book, I'd have to say.  Look, just scour your text for a straight up definition for finance and copy it word for word.  Then see if "goals and functions" are included in that definition, if not, then you might find it in that section of the text.  \n\nObviously you want to have money so that you can do business.  You also want that money managed well - as you want all of your accounts managed well ...  God I hate questions like that.  \n\nLook - business finance isn't in my dictionary of accounting terms.  It's however the idiot author wants to define it.  I'd have to say that "business finance" isn't used in your book to describe finance operations, like I talked about above... \n\nman I'm sorry I gotta quit this I'm too irritated...
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A diversified protfolio.\nAccording to financial theory widely accepted and used in practise. The only investment with a guaranteed return is FDIC insured accounts or goverment bonds. Beyond that the more risk you are willing to take the greater returns you can expect.\n\nA financial advisor can help you assess you risk tolerance level and then advise you how much of your investment to allocate to US stocks, International Stocks, bonds, and/or cash.\n\nIf any investment was certain to be worth more next year, the price would have already risen today.\n\ngood luck
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Valuation of financial derivatives (options, futures, forwards, etc)\nReal hard math, but real good money.
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It is a Public Income note - basically a hybrid equity/debt security.  Companies issue them to raise capital, much like a preferred stock.  People buy them for the dividend flow, typically.
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Capitol investors. You need to find people who are willing to fund this for you if you don't want to risk/don't have your own funds. A business plan would not hurt either. People like to have some sort of assurance you are on the right track before they write you a check.
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Equity = Less risk \nDebt = More risk\n\nFor a particular amount of capital, \nGreater the debt, greater the risk, greater the return to equtiy\nGreater the equity, lesser the risk, lesser the return to equtiy\n\nSo depending on the situation whether greater risk is to be taken to earn greater return for equity or lesser risk is to be taken accepting lesser returns for equity ... is to be decided upon..\n\nhttp://www.futureaccountant.com/
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Speculation involves the buying, holding, and selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. Speculation or agiotage represents one of three market roles in western financial markets, distinct from hedging, long term investing and arbitrage.\n\n\nMost non-professional traders lose money on speculation, while those who do make money tend to become professionals\n\nThe service provided by speculators to a market is primarily that by risking their own capital in the hope of profit, they add liquidity to the market and make it easier for others to offset risk, including those who may be classified as hedgers and arbitrageurs.
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I work for an IFA (independent financial adviser) his role is to advise on mortgages, insurances, pensions and investments. He is really good at his job, pulls people out of a rut mortgage wise, sources all providers for the best deals going. Clients come back time and time again. So do investment clients just the same. They are a regulated company and really do work long hours and are very commit ed. If you are thinking of this kind of work you have to be committed and work very long hours, People expect you to visit after their working day, forgetting that you have already been at work all day. They do a good job, that's all I can say.
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Repos, swaps, swaptions, etc are the exchange of one thing for another. Often, someone with floating rate debt liability will want to "fix" that...so, they 'swap' it for fixed rate. Repos are the lending/borrowing of instruments for a short period of time. Derivatives essentially make risk transfer easier. IE, a future is a derivative of the underlying. If I am a farmer, and i have just finished planting corn...I know that in Sept I will be harvesting that corn. I know how much i spent on corn seed. i know how much i spent on fuel to plant, i know what water and fertilizer cost, what my mortgage and living expenses are...everything. Everything EXCEPT what I will get for my corn in September. Well, I can turn that variable into a fixed amount by SELLING September corn futures. That is, I agree that in sept, i will deliver corn at whatever dollar price i have agreed. Who would buy sept corn futures?? Well, who will be producing corn products in sept??? How about kellogg??? They KNOW they will still be making corn flakes...they know what their labor costs are...their factory costs etc etc...but they don't know corn PRICES in sept. So, they can go and buy sept corn futures. Futures can help both buyers and sellers of commodities....and futures are traded on just about anything you can think of.
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Try here:\n\nhttp://www.capital-flow-analysis.com/mt-weblog/mt-arquive/2006/01/mortgage_backed.html
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You question is unclear.\n\nI think you are asking for a definition of loans to investment money with.\n\nInvestment credit, as a term, usually refers to one of two things --margin credit and business loans.\n\nMargin credit is credit extended by a broker to facillitate the purchase of investments you do not currently have the funds to buy.\n\nBusiness loans are loans to help you invest in assets to support a future or current stream of cash.  This can be for a traditional business or rental real estate.\n\nHope this helps, I was not sure exactly what you were asking.
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Hi - I'm a trader...Highest Return?\n\nStocks won't because they require you to put forward the full amount of capital. Hedge Funds - you have little control over what they invest in - and i doubt they can match any professional trader's returns! \n\nYou're left with futures/forex and options. I don't have experience with futures so I can't comment but forex dealers give you a leverage of 100:1. You only need to put in 1% of capital in your trading. What does that mean?? well percentage wise your returns will be phenonemal. You can achieve the same leveraged affect with options as well as this instrument called CFDs.