What is meant by the “five Cs”?
The five Cs are five words that summarize the criteria for extending credit used by commercial banks. Specifically, they are: a. Character – does the…
Articles by MbaNotesWorld
Forward contracts another kind of derivative security
Some financial professionals consider forward contracts another kind of derivative security. Why do you think this is so? A derivative security is a contract whose…
Quality-leading companies
In what way(s) are quality-leading companies changing their approach to the control of working capital? Quality-leading companies are finding many ways to improve their production,…
How does a forward contract work as a hedging device?
A forward contract locks in an interest rate or exchange rate for a specified future time. It insulates the company from changes to that rate…
In efficient financial markets, all hedging devices should be perfect substitutes!
In general, alternative hedging devices are reasonably good substitutes for one another. However this statement is not quite true for at least three reasons: (1)…
How does a derivative security work as a hedging device?
Financial managers can use a derivative security to hedge the asset to which the derivative is connected by creating an opposite exposure to the asset….
Strategy
The term strategy has entered the management literature comparatively much later than its use in Military Science. Game theorists have used strategy-in the same sense…
Features of Strategy
1. Strategy relates the firm to its environment, particularly the external environ-ment in all actions whether objective setting, or actions and resources required for its…
Strategy and Tactics
It is beneficial to make distinction between strategy and tactics so that managers can concentrate themselves on strategic functions rather than engaging in tactical functions….
Distinction between Strategy and Tactics
1. Level of Conduct . As discussed earlier, strategy is developed at the highest level of management either at the headquarter or at major divisional…