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Economics & Finance
Articles by Praveen Varghese Thomas
Page 2 of 75
Escheatment
Escheatment is a legal process where unclaimed assets or property are transferred to the state when the rightful owner cannot be located or identified. This mechanism ensures that abandoned property is not lost permanently and can be put to beneficial public use. The process protects both individual property rights and serves the broader public interest. Key Concepts Escheatment operates on the principle that property should not remain abandoned indefinitely. The concept dates back to feudal times when landowners would reclaim unused property from tenants. In modern times, escheatment applies to various unclaimed assets including bank accounts, insurance policies, securities, ...
Read MoreEarly Adopters
Early adopters are individuals or organizations who are among the first to try new products, technologies, or ideas. They play a crucial role in the innovation lifecycle by taking risks on unproven concepts and helping bridge the gap between innovation and mainstream adoption. These risk-taking individuals are typically enthusiastic about technological advancements and willing to invest time and resources in emerging solutions. Key Concepts Early adopters represent the second stage in the technology adoption lifecycle, following innovators but preceding the early majority. Unlike innovators who focus purely on the technology itself, early adopters are more ...
Read MoreDomestic Corporation
A domestic corporation is a business entity that is incorporated and operates within the same country where it was legally formed. These corporations have separate legal status from their owners, can own property, enter contracts, and are subject to the home country's laws and regulations. Key Concepts A domestic corporation is registered with the government and has legal standing as a separate entity from its owners. It must follow domestic laws and policies while benefiting from legal protections and economic incentives offered by the home country. Domestic corporations can be privately or publicly owned and ...
Read MoreDividend Stripping
Dividend stripping is an investment strategy where investors purchase shares of a company just before it pays dividends and sell them shortly after receiving the dividend payment. This short-term trading technique aims to capture dividend income without holding the stock for extended periods, though it carries significant risks and tax implications. How Dividend Stripping Works The dividend stripping process follows a simple timeline: Purchase shares − Buy shares before the ex-dividend date (the cutoff date to be eligible for dividends) Receive dividend − Collect the dividend payment on ...
Read MoreCoupon Bond
Coupon bonds are fixed-income securities that pay regular interest payments to bondholders through periodic coupon payments. They are debt instruments issued by corporations, governments, and municipalities to raise capital, providing investors with predictable income streams until maturity. Formula The present value (price) of a coupon bond is calculated using the following formula: $$\mathrm{PV = \frac{C_1}{(1+r)^1} + \frac{C_2}{(1+r)^2} + ... + \frac{C_n}{(1+r)^n} + \frac{FV}{(1+r)^n}}$$ Where: PV − Present value (price) of the bond C − Coupon payment r − Market interest rate (discount rate) FV − Face value of the bond n − Number of periods ...
Read MoreCompulsory Convertible Debenture
A Compulsory Convertible Debenture (CCD) is a unique financial instrument that combines debt and equity features, issued by companies to raise capital. Unlike regular debentures, CCDs must be converted into equity shares at a predetermined time or when specific conditions are met, making the conversion mandatory rather than optional. Key Concepts CCDs are hybrid instruments that provide companies with debt financing initially while eventually converting to equity. They offer investors regular interest payments during the debt phase and potential capital appreciation upon conversion to shares. The conversion terms, including the conversion ratio, price, and timeline, are predetermined at ...
Read MoreBasis Point in the Mortgage
A basis point is a unit of measurement used in finance to express changes in interest rates, particularly in mortgages. One basis point equals 0.01% or one-hundredth of a percentage point, providing a precise way to quote and calculate interest rate variations in mortgage loans. Formula The conversion between basis points and percentages follows this formula: $$\mathrm{Percentage = \frac{Basis\ Points}{100}}$$ Or conversely: $$\mathrm{Basis\ Points = Percentage \times 100}$$ Where: Basis Points − The number of basis points to convert Percentage − The equivalent percentage value Example Calculation Let's examine how ...
Read MoreApplying for a Forex Card
A forex card, also known as a prepaid travel card, is a convenient payment instrument that allows travellers to load multiple foreign currencies onto a single card for international transactions. These cards provide a secure and cost-effective alternative to carrying cash or using credit cards abroad, offering fixed exchange rates and protection against currency fluctuations. Key Features of Forex Cards Forex cards offer several advantages that make them popular among international travellers: Multiple Currency Loading − Load up to 16 different currencies on a single card, eliminating the need to carry multiple currencies ...
Read MoreGold Leasing
Gold leasing is a financial arrangement where gold owners lend their precious metal to borrowers (typically jewelers, manufacturers, or financial institutions) for a specified period in exchange for regular interest payments. This practice allows gold holders to generate income from their idle gold assets while retaining ownership rights. How Gold Leasing Works The gold leasing process involves several key participants and steps. Gold owners (leasers) provide their gold to borrowers who need the metal for business operations, such as jewelry manufacturing or trading activities. The borrower pays a predetermined lease rate, typically ranging from 4-5% annually, while the ...
Read MoreESG Investing
ESG investing refers to an investment approach that considers Environmental, Social, and Governance factors alongside traditional financial metrics when making investment decisions. This sustainable investing strategy allows investors to generate returns while supporting companies that prioritize positive environmental and social impact. Key Concepts ESG investing evaluates three core pillars: Environmental (E) − Climate change mitigation, renewable energy adoption, waste reduction, and sustainable resource management Social (S) − Employee welfare, community relations, diversity and inclusion, and human rights practices Governance (G) − Corporate leadership quality, board diversity, executive compensation, and transparent business practices Companies receive ESG scores ...
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