Financial Markets — Cheatsheets
Equity vs. debt comparison
|---|---|---|
| Represents | Ownership stake | Loan to issuer |
|---|
| Return | Dividends + price appreciation (variable) | Fixed coupon interest (predictable) |
| Risk | Higher | Lower |
| Liquidation priority | Paid after debt holders | Paid before equity holders |
Bond terminology
|---|---|
| Coupon | Periodic interest payment |
|---|
| Face value | Principal repaid at maturity |
| Maturity date | When principal is repaid |
| Yield | Effective return, moves inversely to price |
Mutual fund types
|---|---|---|
| Actively managed | Fund manager makes discretionary choices | Outperform benchmark |
|---|
| Passive/Index fund | Replicates a specific index | Match benchmark performance |
|---|---|
| NAV (Net Asset Value) | Per-unit value of fund holdings, calculated once daily |
|---|
| Unit | An investor's proportional holding in the fund |
SEBI's regulatory scope
|---|---|
| IPO/listed company disclosure | Ensures investors have material information |
|---|
| Mutual fund structure | Standardized fund categorization, disclosure |
| Market intermediaries | Brokers, stock exchanges — fair trading practices |
| Derivatives access | Additional eligibility/risk-disclosure requirements |
(needs verification — recheck against current source: specific SEBI regulations periodically updated.)
Derivatives quick reference
| Instrument | Obligation? | Structure |
|---|
|---|---|---|
| Futures | Yes — both parties obligated | Standardized contract, predetermined price/date |
|---|
| Options | No — buyer has right, not obligation | Premium paid for the right to transact |
|---|---|
| Hedging | Using a derivative to reduce existing risk exposure |
|---|
| Speculation | Using a derivative to take on new risk exposure for profit |
| Leverage | Controlling a large position with a smaller capital commitment — amplifies gains and losses |
| Strike price | Predetermined transaction price in an options contract |
This content is factual/educational, not investment advice or a recommendation regarding any specific security.
