What is Triangular Arbitrage?
Triangular Arbitrage is a form of arbitrage that exploits pricing discrepancies resulting from the trading of three different currencies in the foreign exchange market. In order to be successful, one must first know the factors that make triangular arbitrage profitable. These factors include market inefficiency, time lag between transaction processing, costs, and profitability. In this article, we'll go over...
Irrevocable Letter of Credit
What is an Irrevocable Letter of Credit An irrevocable letter of credit is a type of financial guarantee that is typically used in international trade transactions. It is a guarantee from a bank that the funds will be available to pay for a specified amount of goods or services. The key difference between a revocable and irrevocable letter of credit...
What Is An Anticipatory Breach?
An anticipatory breach is when one party makes a declaration that it intends to break a contract before it actually happens. It may be a breach of contract or an anticipatory repudiation. In either case, the breaching party may withdraw its repudiation by saying something that is not in accordance with its promise. However, the breaching party must still...
Gross Income Multiplier
What is the Gross Income Multiplier (GIM) and how to calculate it? The Gross Income Multiplier (GIM) is a measure of how much an economy can grow in response to an increase in government spending. In simple terms, it tells us how much each dollar of government spending will increase GDP. The GIM is calculated by dividing the change in GDP...
Liquidity Preference Theory
What is liquidity preference theory The liquidity preference theory is a key component of Keynesian economics, which argues that the demand for money is a function of the interest rate. The theory states that people prefer to hold cash rather than other assets when the interest rate is high. In other words, people are more likely to save money when...
Regulation U
ESOPs are not subject to Regulation U Unlike other types of employee stock ownership plans, ESOPs do not have to comply with Regulation U. In most cases, nonbank lenders are subject to slightly different rules for lending against securities. In some cases, however, a loan made against an ESOP is exempt from Regulation U requirements. For more information, read the...
Proxy Fight
What is a proxy fight and how does it work A proxy fight is a battle between competing groups of shareholders for control of a company. It usually happens when one group tries to overthrow the existing management team in order to implement their own strategy for the company. In order to win a proxy fight, the challenging group needs...
Outcome Bias
What is outcome bias and how does it impact our decision-making process Outcome bias is a cognitive bias that occurs when we allow the outcome of a decision to influence our evaluation of that decision. In other words, we tend to judge a decision by its results, rather than by the quality of the decision itself. Outcome bias can lead...
The Hindenburg Omen
The Hindenburg omen was a recently proposed technical analysis pattern named after the disastrous Hindenburg plane disaster. Jim Miekka believed it could predict crashes in the stock market. This article will discuss the signals, reliability, and reliability of this omen. It will also address whether it is a bullish or bearish indicator. What is the Hindenburg omen? The Hindenburg omen signal...
Price Sensitivity : Definition and Calculation
The term price sensitivity refers to a product's ability to impact purchasing behavior. Consumers react differently to price changes, and sensitivity varies based on the product, economic factors, and even individual preferences. This article will explore the varying levels of price sensitivity and the factors that determine it. Listed below are some common examples of price sensitivity studies. Read...