Never miss a great news story! Get instant notifications from Economic Times Allow Not now. Perfect competition describes a market structure where competition is at its greatest possible level. To make it more clear, a market which exhibits the following characteristics in its structure is said to show perfect competition: Large number of buyers and sellers 2. Homogenous product is produced by every firm 3. Free entry and exit of firms 4.

Zero advertising cost 5. Consumers have perfect knowledge about the market and are well aware of any changes in the market. Consumers indulge in rational decision making. All the factors of production, viz. No government intervention 8. No transportation costs 9. Each firm earns normal profits and no firms can earn super-normal profits.

Every firm is a price taker. It takes the price as decided by the forces of demand and supply. No firm can influence the price of the product. Ideally, perfect competition is a hypothetical situation which cannot possibly exist in a market.

However, perfect competition is used as a base to compare with other forms of market structure. No industry exhibits perfect competition in India. Mortgage-backed security MBS is a type of asset-backed security collateralised by a pool of mortgages. This essentially represents transfer of credit risk from a primary lender, typically the originating bank, to an investment bank. The process involves purchase of mortgage loans by a bulge bracket investment bank from various loan originators and bundling them into pools.

By purchasing such mo. A nation is a sovereign entity. Any risk arising on chances of a government failing to make debt repayments or not honouring a loan agreement is a sovereign risk. Such practices can be resorted to by a government in times of economic or political uncertainty or even to portray an assertive stance misusing its independence. A government can resort to such practices by easily altering.

It is an abbreviation for the term "British exit", similar to "Grexit" that was used for many years to refer to the possibility of Greece leaving the Eurozone.

Brexit refers to the possibility of Britain withdrawing from the European Union EU. The country will hold a referendum on its EU membership on June Why the Call for Referendum?

When David Cameron became the prime minist. A soft loan is basically a loan on comparatively lenient terms and conditions as compared to other loans available in the market. These easier conditions might be in the form of lower interest rates, prolonged repayment duration, etc. The repayment of these soft loans might also include interest holidays. This process of extending soft loans is also known as soft financing or conces.

This is a theory which asserts that announcement of increased dividend payments by a company gives strong signals about the bright future prospects of the company. An announcement of an increase in dividend pay out is taken very positively in the market and helps building a very positive image of the company regarding the growth prospects and stability in the future.

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Fallout risk or borrower fallout is one of the two components of pipeline risk, the other being price risk. Usually, a high fallout risk occurs when the finalisation of a mortgage deal is contingent upon another deal, such as the sale of a real estate asset. Shareholder value is the value enjoyed by a shareholder by possessing shares of a company.

It is the value delivered by the company to the shareholder. Increasing the shareholder value is of prime importance for the management of a company. So the management must have the interests of shareholders in mind while making decisions. The higher the shareholder value, the better it is for. Quantity demanded is the quantity of a commodity that people are willing to buy at a particular price at a particular point of time. Different quantities can be demanded at different prices at a particular point of time.

What parameters are required for a market to exhibit perfect competition? | Investopedia

When all the prices, along with quantity demanded, are drawn on a graph, the demand curve is formed. Quantity demanded can change at the same price depending upon f.

Profitability index is a financial tool which tells us whether an investment should be accepted or rejected. It uses the time value concept of money and is calculated by the following formula. The accept-reject decision is made as follows: If PI is greater than 1, accept the investment.

It is essentially the profit earned by the government by printing currency. It can also be termed as a source of revenue for governments as the value of money printed is generally higher than the cost of producing it. As obvious, if the currency produced values more than the cost involved.

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Percentage Point The difference between two percentages is termed as percentage point. Percentage point is used to show the changes in an indicator. Phillips Curve The inverse relationship between unemployment rate and inflation when graphically charted is called the Phillips curve. Not to be Missed Anil Kumble steps down as coach of Indian cricket team, cites differences with Virat Kohli as reason.

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