spin-Offs In a "spin-off," a parent company distributes shares of a subsidiary to the parent company's shareholders so that the subsidiary becomes

a separate, independent company. The shares are usually distributed on a pro rata basis. State law and the rules of the stock exchanges determine whether a company must seek shareholder approval for a spin-off.

Call money market

The call money market deals in short term finance repayable on demand, with a maturity period varying from one day to 14 days. S.K. Muranjan commented that call loans in India are provided to the bill market, rendered between banks, and given for the purpose of dealing in the bullion market and stock [2] exchanges. Commercial banks, both Indian and foreign, co-operative banks, Discount and Finance House of India Ltd.(DFHI), Securities trading corporation of India (STCI) participate as both lenders and borrowers and Life Insurance Corporation of India (LIC), Unit Trust of India(UTI), National Bank for Agriculture and Rural Development(NABARD)can participate only as lenders. The interest rate paid on call money loans, known as the call rate, is highly volatile. It is the most sensitive section of the money market and the changes in the demand for and supply of call loans are promptly reflected in call rates. There are now two call rates in India: the Inter bank call rate'and the lending rate of DFHI. The ceilings on the call rate and inter-bank term money rate were dropped, with effect from May 1, 1989. The Indian call money market has been transformed into a pure inter-bank market during 200607.

Modified Duration of a Bond Modified duration indicates the percentage change in the price of a bond for a given change in yield. It is a more adjusted measure of Macaulay duration that produces a more accurate estimate of bond price sensitivity.

Price Value of a Basis Point (PVBP)

This measure is the absolute value of the change in price of a bond for a one basis point change in yield. It is another way to measure interest-rate risk. It does not matter if it is an increase or decrease in rates, because such a small move in rates will be about the same in either direction according to the second property of a bond's price . This is also know as Dollar Value of an 01 (DV01). PVBP = initial price- price if yield is changed by 1 basis point Clean Price: If Bond prices were quoted by calculating the present value of all the future cash flows then one would not under stand whether the change in the price of a bond occurred because of change in the market interest rate or accrued interest. So the bond prices are quoted by deducting the accrued interest from the the present value of future cash flows of the bond. This quoted price is called clean price

Dirty Price: Dirty price is the settlement price of a bond. It contains two components clean price and accrued interest. Dirty Price or Settlement price = Clean Price + Accrued interest

Embedded option
An option that is part of the structure of a bond that gives either the bondholder or the issuer the right to take some action against the other party, as opposed to a bare option, which trades separately from any underlying security. An option or other special provision attached to a bond. For example, an embedded option in a convertible bond is the ability of the bondholder to exchange the bond for shares in the underlying common stock. Likewise, an embedded option may enable the issuer to call a callable bond before maturity. It differs from a bare option, which is the trading of a standalone security separately from any bond.