1) pick a country you wish to focus on 2) compare and contrast any (three) of th

Question

1) pick a country you wish to focus on

2) compare and contrast any (three) of the following topics relating to anything we learned this term. (credit scores, credit cards, cars, mortgages, mutual funds, student loans, stocks, retirement)

For example, are credit scores used and what companies do these, what are the ranges, is there any difference? Does the county you chose employ credit cards? if so as much, less or more than the U.S. Give me data. What stock markets are in the country you chose? Name companies trading there that are not in the U.S.. Do mortgages exist? What are the lending rates? Are the terms still 15 or 30 years or are they shorter?

3) just write it up, no length requirement, just find out some cool stuff and you get points. easy peasy.

4) thanks for educating me, this is going to be so much fun for me to learn from you.

Explanation / Answer

The country which is being focused on is India compared with USA:

1. Stock Market : India: Primarily there are two types of stock markets – the primary market and the secondary market. This is true for the Indian stock markets as well. Basically the primary market is the place where the shares are issued for the first time. So when a company is getting listed for the first time at the stock exchange and issuing shares – this process is undertaken at the primary market. That means the process of the Initial Public Offering or IPO and the debentures are controlled at the primary stock market. On the other hand the secondary market is the stock market where existing stocks are brought and sold by the retail investors through the brokers. It is the secondary market that controls the price of the stocks. Generally when we speak about investing or trading at the stock market we mean trading at the secondary stock market. It is the secondary market where we can invest and trade in the stocks to get the profit from our stock market investment. Apart from these classifications there are also different types of stock market in India and the classification is made on the type of instrument that is being traded at the market. Both the Bombay Stock Exchange and the National Stock Exchange have these types of stock markets

United States Largest Stock/Securities Markets: The New York Stock Exchange (NYSE), American Stock Exchange (AMEX), National Association of Securities Dealers Quotation System (NASDAQ).

2. Lending Rates of India & USA : The main reason lending rates are so high in India is because inflation is so high. Interest rates on bank loans will almost always be higher than inflation, otherwise what you pay back would actually be worth less than what you borrowed.
Inflation in India has average around 10% a year over the last few years, compared with about 2% a year in the US. So, you would expect interest rates to be about 8% higher in India just because of that.

Finally, the US central bank has been intervening in the markets recently specifically to lower interest rates (through setting its own interest rates very low and through quantitative easing). India, on the other hand, has been trying to increase interest rates in order to bring down inflation (with high interest rates, people are more likely to save rather than spend and lower spending reduces inflation).

3. Credit Scores :

In India, there are four credit information companies licensed by Reserve Bank of India. The Credit Information Bureau (India) Limited (CIBIL) has functioned as a Credit Information Company from January 2001. Subsequently in 2010, Experian, Equifax and Highmark were given licenses by Reserve Bank of India to operate as Credit Information Companies in India.

Although all the four credit information companies have developed their individual credit scores, the most popular is CIBIL credit score. The CIBIL credit score is a three-digit number that represents a summary of individuals' credit history and credit rating. This score ranges from 300 to 900, with 900 being the best score. Individuals with no credit history will have a score of -1. If the credit history is less than six months, the score will be 0. CIBIL credit score takes time to build up and usually it takes between 18 and 36 months or more of credit usage to obtain a satisfactory credit score.

USA:

In the United States, a credit score is a number based on a statistical analysis of a person's credit files, that in theory represents the creditworthiness of that person, which is the likelihood that people will pay their bills. A credit score is primarily based on credit report information, typically from one of the three major credit bureaus: Experian, TransUnion, and Equifax. Income is not considered by the major credit bureaus when calculating a credit score.

There are different methods of calculating credit scores. FICO score, the most widely known type of credit score, is a credit score developed by FICO, previously known as Fair Isaac Corporation. It is used by many mortgage lenders that use a risk-based system to determine the possibility that the borrower may default on financial obligations to the mortgage lender. All credit scores must be subject to availability. The credit bureaus all have their own credit scores: Equifax's ScorePower ( FICO score from Equifax ), Equifax Credit Score, Experian's PLUS score, and TransUnion's credit score, and each also sells the VantageScore credit score. In addition, many large lenders, including the major credit card issuers, have developed their own proprietary scoring models.

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