A country’s economy plays a significant role in the prices of items within it. The economic factors in a nation also dictate the investments market. Most security prices fluctuate with fluctuations in a country’s economic environment. Some investors may take advantage of these fluctuations and base their investment strategy accordingly. …

Auditors do not provide absolute assurance for audit assignments. It is because they cannot test every single transaction or balance. Usually, auditors work with limitations, such as time, which require them to complete their work before a specific time. However, they still need to test items that they may consider …

Investment strategies include principles that seek to achieve an investor’s financial and investment objectives. These strategies may differ from one investor to another based on various factors. These factors may include the investor’s goals, resources, time horizon, risk tolerance, etc. Similarly, some investment strategies may also depend on specific circumstances …

What is an Audit Approach? The term audit approach defines the strategy that auditors use when conducting an audit. It allows auditors to perform their tasks effectively and efficiently. The audit approach may differ based on several factors. These factors may include the nature of the client and its industry, …

What are Mortgage-Backed Securities? Mortgage-backed securities (MBS) are financial instruments that have similar characteristics as bonds. These securities use mortgages or a collection of mortgages as collateral. Like other financial instruments, MBS also gets traded in the market. Mortgage-backed securities are a type of asset-backed securities and allow investors to …

The conventional investment categories, i.e., stocks, bonds, and cash, can provide high returns. However, piling these up can be highly risky for investors. Therefore, some investors usually go beyond these investment categories to diversify their portfolios. However, they may lose some benefits that these investments provide, such as liquidity. For …

What are Credit Default Swaps? A credit default swap (CDS) is a financial instrument that allows investors to exchange their credit risk with another party. It is a type of swap, which is a financial derivative. Credit default swaps require one party to acquire a CDS from another party. It …

Investing in stocks, bonds, cash, and other asset classes is prevalent among investors. Usually, they make these investments themselves or through investment advisors. Some investors may also pool their capital and invest it into a fund. These funds have managers that make investments on their behalf. These may include hedge …

What are Preference Shares? Preference shares, also known as preferred stock, are a type of stock that companies issue. Under some specific circumstances, the shares will get preferential treatment over ordinary or common shares. These circumstances may include the distribution of dividends or compensation in case the underlying company liquidates. …

Companies that go through a challenging time usually have limited options when it comes to raising funds. In some cases, these companies may also go into bankruptcy. Therefore, most investors or creditors don’t trust them with finance. However, these companies can still raise finance through their limited options. One of …