Proprietary trading is a term that relates to the type of trading in which the trader uses his or her own money to participate in the market. This differs from depositor funds where the trader uses other people's money...
Default Risk
A default risk occurs when a partner in a business transaction does not live up to his or her obligations. This can occur in the form of a bank or other financial institution that fails to return an...
What is risk parity
Risk parity is an investing strategy that aims to balance risk across asset classes. The goal is to achieve a portfolio with a consistent level of risk, regardless of market conditions. To do this, risk parity...
Net interest income is the difference between revenues from interest-bearing assets and costs of servicing liabilities. Bank assets typically consist of commercial and personal loans, mortgages, investment securities, and construction loans. Liabilities, on the other hand, are the customer...
What is a Bear Call Spread
A bear call spread is an options strategy that involves buying and selling two calls with different strike prices but with the same expiration date. The strike price of the call you sell will...
In economics and accounting, a direct cost is a cost directly associated with the object for which the account is maintained. In contrast, a joint cost is a cost incurred in producing and delivering several products. This type of...
Introducing Short Call
Short call is an investing strategy that involves selling call options with the goal of making a profit when the underlying security's price declines. To implement a short call strategy, an investor typically borrows shares of the...
What is Arrow's Impossibility Theorem
Arrow's Impossibility Theorem is a key result in social choice theory, which studies how collective decisions can be made from the preferences of individual voters. The theorem states that it is impossible to construct a...
If you have ever wondered how to calculate marginal profit, you have come to the right place. The definition of marginal profit is simple: it is the profit made from a unit of production. But how does this profit...
What is platykurtic data and why is it important
Platykurtic data is data that is more evenly distributed than normal data. In statistics, this term is used to describe a distribution that has a low kurtosis. Kurtosis is a measure...