A loan is a transaction between two parties, a lender and a borrower. The lender is the party offering a resource in exchange for an incentive. This transaction may also include collateral, which provides the lender with higher security. Usually, loan transactions involve paying a monetary amount. However, investors also …

Futures contracts are agreements that allow investors to deal in specific commodity assets or securities. With these contracts, investors can fix their future prices for a particular time in the future. Futures contracts allow investors to hedge against various risks associated with price changes. With these contracts, investors undertake an …

Hedging is a technique that investors use to mitigate any specific risks that they face with investments. Usually, it includes investing in derivatives to counterbalance the adverse impacts of any risks. There are many types of hedge instruments that investors may use for that purpose. For example, investors can use …

Having a diversified portfolio of investment is crucial for any investor. Traditionally, investors have divided their portfolios into equity and debt investments. With the vast number of options available nowadays, however, the same does not apply. Investors have various options when it comes to building a diversified portfolio. One such …

Who are Commodity Trading Advisors? Commodity trading advisors are individuals or institutions that provide financial advice to investors related to future options, futures contracts, etc. Usually, commodity training advisors are professionals who go through a registration process to become an advisor. Primarily, these advisors are responsible for providing trading advice …

Forex trading includes buying or selling currencies to profit from the differences in exchange rates. Due to the widespread availability of markets, forex trading has become a popular choice among many investors. There are several strategies that investors may use to profit in the forex market. One such strategy is …

In any decision-making process, bias can be significantly critical. Simply put, it is an irrational prejudice towards a specific factor. For most individuals, these include tendencies to make decisions without critical thinking or consideration. There are several biases that individuals may face during their decisions. One such bias consists of …

When making decisions, individuals may come across various biases or heuristics. These biases can impact their decisions adversely. Usually, biases stem from pre-existing beliefs or how individuals perceive information. These biases may also have an impact on financial decisions. One such bias that may exist in finance is the framing …

What is a Sovereign Wealth Fund? A sovereign wealth fund represents a pool of funds owned by governments. These funds usually include any surplus reserves that countries accumulate over a period. The government may consist of both central and sub-national governments. Sovereign wealth funds include investments in foreign financial assets …

Investors need a diversified portfolio to mitigate any risks that come with their investments. During this process, they can use several techniques or approaches. Traditionally, most investors make decisions based on their objectives. However, investors can also build a portfolio based on their risk appetite. One approach they can use …