Officially, there are two kinds of stocks: common and preferred. A company initially sells common stock to investors who intend to make money by purchasing the shares at a lower price and selling them at a higher price. This profit is referred to as capital gains. However, if the company falters, the price of the [...]
Forward Rate Agreements
A forward rate agreement is a contract, based on a notional principal, between two parties to exchange interest at some defined future date based on the difference between two different benchmark rates. These benchmark rates may be floating, such as an interbank rate, or fixed. It is easiest to explain most of these derivatives using [...]