Question { 8219 }

WHY TREASURY BILLS ARE ISSUED ON DISCOUNT BASIS?

Answer

Treasury Bill is a short-term debt obligation backed by the
U.S. government with a maturity of less than one year.
T-bills are sold in denominations of $1,000 up to a maximum
purchase of $5 million and commonly have maturities of one
month (four weeks), three months (13 weeks) or six months
(26 weeks) or less then a term of one year.
Because of their low maturity period, they are sold at a
discount from face value. They do not pay interest before
maturity. The interest(return) is the difference between the
purchase price and the price paid either at maturity (face
value) or the price of the bill if sold prior to maturity.

As Notes are issued in two-, three-, five- and 10-year terms
& conversely, bonds are long-term investments with terms of
more than 10 years, they are paid return in the form of
interest.

Question { TCS, 5811 }

What is gross refinery margin?Explain clearly

Answer

Gross Refinery Margin (GRM) is the differential between
average product prices realized by the refinery less the
average cost of crude oil.

As the International prices of crude oil and petroleum
products have been extremely volatile since 2004, we
consider the average prices & costs.

Question { Broadridge, 7853 }

What is subprime crisis ?

Answer

The US subprime mortgage crisis was one of the first
indicators of the 2007–2010 financial crisis, characterized
by a rise in subprime(relating to or for people with a poor
credit rating) mortgage delinquencies and foreclosures, and
the resulting decline of securities backing said mortgages.
Its kinda broad topic, which could be understood more
clearly at
http://www.thinkplaninvest.com/2008/12/what-is-subprime-crisis/
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis

Question { Copal Partners, 24909 }

What is the difference between ROE(Return on Equity) and
ROCE(Return on Capital Employed)?

Answer

Return On Equity-ROE

The amount of net income returned as a percentage of
shareholders equity. Return on equity measures a
corporation's profitability by revealing how much profit a
company generates with the money shareholders haveinvested.

Return on Equity = Net Income/Shareholder's Equity

Net income is for the full fiscal year (before dividends
paid to common stock holders but after dividends to
preferred stock.) Shareholder's equity does not include
preferred shares.

Also known as "return on net worth" (RONW).

Return On Capital Employed-ROCE

A ratio that indicates the efficiency and profitability of a
company's capital investments.

ROCE=EBIT/Total Assets-Current Liabilities

Question { 40908 }

the differences between share capital and loan capital.
And the similarities.

Answer

loan capital

Part of a firm's capital employed that is
(1) raised from bank or finance company as long-term loans &
from debt-equity investors in the form of debentures or
preferred stock
(2) it earns a fixed rate of interest instead of dividends, and
(3) must be repaid within a specified period, irrespective
of the firm's financial position.

Also called borrowed capital.

Share Capital

Part of a firm's capital employed that is
1)raised by issuing shares in return for cash or other
considerations.
2)It earns dividends
3)It needs to be repaid only at the time of company's
dissolution.
4)Share capital can be composed of both common and preferred
shares.

Also known as "equity financing".

Question { Bank of Maharashtra, 67887 }

What is meant by working capital gap?

Answer

Its nothing but...
Total Current Assets-Total Current Liabilities...
Total Current Assets-Total Current Liabilities=Working
Capital Gap

Question { 7064 }

if flotation costs go down,the cost of new preferred stock
will:

Answer

Whether flotation costs go down or up,the cost of new
preferred stock will be the same, as it doesn't affect the
price of the stocks. But flotation costs may affect in the
way of discrimination in the dividends..

Question { 9842 }

What is accounting?

Answer

Accountancy or accounting is the process of maintaining,
auditing, and processing financial information for business
purposes.

Accountancy allows the creation of accurate financial
reports that are useful to managers, regulators, and other
stakeholders such as shareholders, creditors, or owners. The
day-to-day record-keeping involved in this process is known
as bookkeeping.