Securities may be assigned the following rights. The right to demand payment of a certain sum of money (bonds, bills of exchange, checks, savings certificates, trust certificates and more). The right to participate in management and on a portion of profits as dividends (shares).
Most often the ownership or the right of pledge on the goods in the possession of another person, such as a holder or custodian. These securities have secured rights to certain products and are both a means of disposal of goods, that is, documents of title (bill of lading, certificates of the warehouse).
The cost and price of securities
Securities have two values: the nominal (par) value (a value representative of the actual capital) and foreign exchange (market) value. Nominal value of the securities is the amount of money that provides security when exchanging it for real capital.
The market price of a security is the result of capitalization of property rights. It is calculated as the sum of the capitalization of property and other rights of the securities. The market price of a security at Kenya Stock Market – this is monetary value of its market value, which is calculated by the following formula: Price = Market Value × (1 + percentage deviations of the market price)
Valuation of securities
In reality, there are many methods to assess the securities. The most common include estimating the expected return, way to evaluate on the basis of constant dividend growth and the modified model of the valuation of securities. It is usually engaged in the valuation of investment banks or independent analytical agencies that provide independent analyst price of securities at Kenya Stock Market.
Barrier options are a special form of options and are among the exotic options. The main difference between the options is that barrier options are activated or deactivated by the occurrence of certain events.
Knock-out options expire when the barrier is reached. Since in this example is the barrier to the initial value, it is also referred to as up-and-out call. The counterpart to this would be a down-and-out call that expires when a barrier is below the initial price.
In the knock-in option, it is the opposite: it is only valid if the barrier is reached in the course of time, at least once, otherwise it will be forfeited. In this example, it is consistent enough, an up-and-in call, its counterpart would be a down-and -in call. The latter would in fact be a bet on a comeback of the stock : in order not to fall, the underlying would have to fall below a barrier, and then stand at the end about the strike again.
