What is a Capital Commitment?
A capital commitment is a financial term that can be used in two similar ways. Capital commitments can be described as the complete inventory of stocks that are in the possession of market makers. In a related manner, a capital commitment can also refer to a business decision that is made by a corporation to invest a portion of its long-term assets over a specified period of time. In the case of relating to inventories of stock, a capital commitment can be viewed as a risk for the market maker. This is due to the fact that inventories of stocks can change in value over time. Depending on the performance of the stock market, the value of those stocks may rise, or they may fall. The risk to the market maker is that the stocks will not appreciate, which will ultimately reduce the overall value of the investment portfolio. What this means for the market maker is that the selection of stocks to include in the inventory should be considered with a great deal of thought. By choosing stocks th
” A capital commitment is a financial term that can be used in two similar ways. Capital commitments can be described as the complete inventory of stocks that are in the possession of market makers. In a related manner, a capital commitment can also refer to a business decision that is made by a corporation to invest a portion of its long-term assets over a specified period of time. . In the case of relating to inventories of stock, a capital commitment can be viewed as a risk for the market maker. This is due to the fact that inventories of stocks can change in value over time.
