–          Embodies the notion that there are a few elemental building blocks or financial contracts that can be combined in a rigorous fashion  to produce an almost unlimited variety of non-standard cash flow expectations.

Advertisement

–          Conceptually, the idea is that all familiar financial securities ca be thought of as having some combination of;

  1. Credit extension (such as loans, bonds, etc.)
  2. Price fixing (such as futures / forward contracts)
  3. Price Insurance (such as call / put options)

–          The invention of new or hybrid financial securities to fit exactly some requirement of an individual financial market participant is a matter of combining these elements into a package of claims that will produce a profile of cash flow expectations meeting this need.

 

Advertisement
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]
52 Comments

Leave a reply

BMS.co.in is aimed at revolutionising Bachelors in Management Studies education, also known as BMS for students appearing for BMS exams across all states of India. We provide free study material, 100s of tutorials with worked examples, past papers, tips, tricks for BMS exams, we are creating a digital learning library.

Disclaimer: We are not affiliated with any university or government body in anyway.

©2020 BMS - Bachelor of Management Studies Community 

A Management Paradise Venture

Ask Us On WhatsApp
or

Log in with your credentials

or    

Forgot your details?

or

Create Account