What is Debt? Debt is the fund borrowed from one party by the other party i.e. debt is an obligation owed by the borrower of fund to the lender of fund. Debt is not available freely it has a cost called interest expense. Interest expense is the cost paid by the borrower for the use [...]

MX Capital is a boutique investment bank focused on Private Equity, M&A and Strategic Advisory. The Associate will work on and be exposed to the entire deal life cycle – from sourcing to execution. Daily tasks include but are not limited to: financial modelling, preparing pitchbooks / presentations, researching & analysing sectors / companies, coordinating with third parties (e.g. due diligence agencies), coordinating process for deals, etc.

What is financial modeling? Financial modeling is creating a complete program/ structure, which helps you in coming to a decision regarding investment in a project/ company. Financial models are abstract representations of a financial decision making. Now these decisions can be derived on a simple piece of paper or in tools such as Excel, MATLAB [...]

Hold on to your seats folks, we are working on launching our very first online contest. It is for all you financial modeling aficionados.  If you have been a regular visitor of our blog, then this should be a breeze. This contest will be run in parallel between 3 B-Schools – Indian Institute of Management [...]

Chartered Financial Analyst Level II Financial Reporting and Analysis mainly consists of two parts – Interpreting the Balance Sheet and Advanced Concepts like Tangible assets, Intangible assets and Goodwill. Click on “Read More” to view the presentation and the video recording of the webinar.

Dear Readers, The answer to the previous question is – • Apply Bayes’ Theorem • P (New / Cure) = P (Cure / New) * P (New) / P (Cure) = 0.6 * 0.25 / 0.375 = 0.40 Here, is the Question of the Day – Let Z be a standard normal random variable. An [...]

Check your preparation level and strategy with FRM course planner from Pristine. This course planner will generate your preparation hours required for each section of FRM Exam. To download the planner, please right click on the the link FRM-Exam-Planner2012 and save the excel.

Pristine is commencing its online CFA batch from 14th August, 2010(Saturday). The first session on Saturday is free for all the participants. Following are the details of the session-
Date: 14th August’2010 (Saturday)
Time: 6pm-10pm (India Time). Others can convert this time to their local time using http://timeanddate.com/s/1t97
Venue: Online
Topic: FSA (Part I)
Instructor: Mr. Paramdeep Singh
Registeration The lecture is free of cost. All the participants are required to register for the class at https://www1.gotomeeting.com/register/739262913

Probability is one of the most useful topics whose application in finance and investment domain is pretty important. Let’s consider a practical example of one of the very interesting applications of probability.
You are a research analyst in an investment bank. Lets consider a hypothetical case, there are two firms in the power industry, Reliance ADAG, and Essar group. Government has decided to cut down the tax on the power sector. As a result of this information you believe the equity of Reliance reflects a 0.89 probability of such decision. The Essar group is equally benefited by the decision. But your analysis show that the equity reflects only 0.45 probability of such decision.

Probability and Statistics are tools for modelling financial markets there risks and returns. The topics are also covered in many finance exams like CFA conducted by CFA institute www.cfainstitute.org, FRM conducted by GARP www.garp.com, PRM conducted by PRMIA www.prmia.org.
A lot of candidates skip this section, finding it hard to understand. However if you see the practical application of probability you will understand its importance in finance domain.
There are a lot of real world applications of probability as can be widely seen in portfolio expected returns and variance.
Probability in broad sense is term used to indicate vague possibility that something might happen. It is also used synonymously with chance.