The term "random walk theory" was coined by French mathematician Louise Bachelier, who believed that share price movements were unpredictable, much like the steps of a drunk.
An abandonment option provides flexibility to a company by allowing it to discontinue or exit a project, investment, or asset if it becomes unprofitable or no longer aligns with strategic goals. This option acts as a safeguard, enabling the company...
International trade can both positively and negatively impact a recession, depending on the nature of the trade relationships and global economic conditions. On one hand, exports can provide a boost to the economy, as they can help increase demand...
An option premium is a difference between the strike price and the current market price of the option contract. Therefore, it is the profit earned by the seller (writer) of an option contract. For in-the-money options, there are two components:...
A price-weighted index and a market-cap-weighted index differ primarily in how they calculate and weigh their components. In a price-weighted index, such as the Dow Jones Industrial Average (DJIA), the weight of each stock is determined by its price...
Green investment is a type of investment that is made by companies and enterprises that produce environmentally friendly products. These companies are rewarded for implementing new technologies and for using and producing environmentally friendly...
A valuation clause is a provision commonly included in contracts or agreements that specifies the method or criteria for determining the value of a particular asset, property, or business entity. It is used to establish a fair and objective valuation...
Top gainers in the stock market are identified by calculating the percentage increase in the price of a stock over a specific period, typically within a single trading day.
A securities market is a healthy market where government, corporate, and semi-government securities are bought and sold.
Stocks and shares are terms that are often used interchangeably, but they have distinct meanings in the world of finance.