An accrual bond is a type of fixed-income security that differs from traditional bonds in terms of interest payment timing. Unlike most bonds, which pay periodic interest (typically semi-annually or annually), accrual bonds do not make regular...
Consumer Price Index - An indicator that measures the change in the average price of goods and services over a period of time. The consumer price index or CPI is very important for understanding the value of a currency. If the consumer price index...
The S&P 500 index is calculated using a market capitalization-weighted methodology, which means that each company in the index is weighted according to its total market value. The formula for calculating the index is:
A ladder refers to a strategy where an investor spreads out their investments across different maturities or time frames. It involves purchasing a series of securities with staggered maturity dates. This strategy is commonly used in bond investing,...
A two-sided market, also known as a two-sided network or platform, is a marketplace or ecosystem that brings together two distinct groups of users or participants, creating value for both sides through interactions and transactions. These markets are...
The relationship between the reinvestment rate and the internal rate of return (IRR) is a crucial aspect of financial analysis and investment decision-making. The IRR is a metric used to evaluate the profitability of an investment, representing the...
Short selling can significantly impact a stock's price through various mechanisms. When investors short sell, they borrow shares and sell them on the market, intending to buy them back at a lower price to profit from the difference. This immediate...
The term "overexposure" in trading refers to the mistake of taking on too much risk. It usually occurs when a trader makes the technical error of putting too much capital into a single position or market.
A bear market and a market correction are both terms used to describe declines in financial markets, but they differ in magnitude, duration, and implications.
People love stocks for various reasons, ranging from potential financial gains to the excitement of participating in the financial markets. One of the primary attractions is the potential for substantial returns. Unlike traditional savings accounts...