See Also: Consumer Price Index Stagflation Balance of Payments What are the Twin Deficits? The Feds Beige Book Economic Indicators Definition Economic indicators are macroeconomic data that describe the condition of an economy. So, use them to determine whether an economy is prosperous and expanding or troubled and contracting. For example, a high unemployment rate
See Also: Economic Order Quantity (EOQ) Accounting Income vs. Economic Income Economic Production Run (EPR) Problem With Days Sales Outstanding Example Economic Income Definition Economic income is the way for companies to account for changes in the value of a given asset in the market. It generally recognizes unrealized gains, in addition to recognizing realized
See Also: Currency Exchange Rates Transaction Exposure Exchange Traded Funds Translation Exposure Hedge Funds Currency Swap Definition Currency swaps are used to manage exchange rate risk. In a currency swap, two counterparties exchange the interest and principal payments on loans in different currencies. The counterparties agree to a set exchange rate, a set maturity, and a
See Also: Currency Swap Transaction Exposure Hot Money Exchange Traded Funds Required Rate of Return Hedge Funds Fiat Money Currency Exchange Rates An exchange rate gives the value of one currency in terms of another. An exchange rate can be computed for any two currencies. Exchange rates are typically quoted to at least four decimal
See Also: Future Value Discount Rate Exchange Traded Funds Backwardation Interest Rate Swaps Arbitrage Contango Definition Contango is a term used to describe the forward yield curve when it is upward sloping and the price of a future commodity is above that of the spot rate. This is the opposite of backwardation. Contango Meaning Contango
See Also: Economic Indicators What is Inflation? Supply and Demand Elasticity The Feds Beige Book Stagflation Consumer Price Index (CPI) Definition The consumer price index is an economic indicator that measures changes in prices of typical consumer expenses. It is also used to measure inflation and the cost of living in a geographic area. For
See Also: Contango Interest Rate Efficient Market Theory Market Dynamics Arbitrage Backwardation Definition Backwardation is a term used to describe a commodities market when the spot rates are higher than the future price of that certain commodity. In other words there is a downward sloping forward curve relative to the spot rate set for maturity
See Also: Efficient Market Theory Economic Indicators Economic Value Added Supply and Demand Elasticity Porters Five Forces of Competition Business Cycle Definition The business cycle refers to recurring patterns of expansion and contraction in an economy. It is also called the economic cycle. During the expansion phase of the cycle of business, the economy is
See Also: Cost of Capital Cost of Capital Funding Capital Asset Pricing Model APV Valuation Capital Budgeting Methods Discount Rates NPV Required Rate of Return Arbitrage Pricing Theory Definition The arbitrage pricing theory (APT) is a multifactor mathematical model used to describe the relation between the risk and expected return of securities in financial markets. It computes
See Also: Arbitrage Pricing Theory Market Positioning Capitalization Inventory to Working Capital Analysis Mining the Balance Sheet for Working Capital Arbitrage Definition Arbitrage is the practice of profiting from the mispricing of an asset that trades in multiple markets. For arbitrage to be possible, an asset must trade in at least two different markets. If the same
Recently I heard Bill Sherrill speak regarding his economic forecast for 2013 and the economic drivers impacting that forecast. For those of you who don’t know Bill, he is the Founder of the Wolff Center for Entrepreneurship and twice appointed Governor of the U.S. Federal Reserve Board. In his presentation, Mr. Sherrill presented the best
Today I attended a presentation by BBVA Research’s Chief US Economist, Nathaniel Kerp, in which he discussed economic trends for 2013 in the US. The overall theme is that the Federal Reserve is trying to convince the public to take risks. I am not sure that is a good idea. Warren Buffet has said that
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