What is merger arbitrage
Merger arbitrage is an investment strategy that is used to take advantage of the share price differential that exists when two companies announce a merger. The theory behind merger arbitrage is that the share prices of...
What is relative value and how is it different from absolute value
Relative value is a term that is used in many different fields, including investing, economics, and math. Put simply, it is the value of one thing in relation...
Pork barrel politics refers to projects funded by government money that come to the district of a particular representative. The concept isn't limited to the United States. There are Romanian and German pork barrels, as well. And in Boston,...
What is accumulated other comprehensive income and why should you care about it
Accumulated other comprehensive income (AOCI) is a component of shareholder equity that represents unrealized gains and losses on investments, foreign currency translation adjustments, and pension plan adjustments....
Channel-stuffing is the practice of overstuffing a retailer's inventory to increase sales. The practice is harmful to the long-term sales of a company because retailers will typically sell excess product in future quarters. This can lower future sales and...
What is free cash flow yield and why is it important
Free cash flow yield (FCF) is a measure of a company's financial performance, calculated as operating cash flow minus capital expenditures. FCF yield is simply the FCF divided by...
A bull spread is a vertical spread options strategy that profits from a moderate increase in the price of an underlying security. The bull spread is a great way to trade options that can be profitable even if you're...
What are menu costs?
Menu costs are a type of transaction cost incurred by firms when they change their prices. Menu costs are one microeconomic explanation offered by New Keynesian economists for macroeconomic price-stickiness, which may cause an economy to...
What is a money factor and what does it mean for your lease payments
Money factor is a term used in the auto leasing industry that refers to the interest rate on your lease. In order to calculate your monthly...
Restricted cash is a component of the "cash and cash equivalents" account
There are several types of investments that may be accounted for in a cash and money market account. These types of investments are highly liquid and are readily...