Homoskedastic
What is homoskedasticity and why is it important in statistics In statistics, homoskedastic is the assumption that the variance of a dependent variable is constant across all values of the independent variable. In other words, homoskedasticity means that the predictors do not have a systematic impact on the outcome variable. This assumption is important because it allows statisticians to make...
Subscription Agreement
What is a subscription agreement and what are the benefits of having one A subscription agreement is a contract between a subscriber and a company that provides a service or product. The subscriber agrees to pay a set amount on a regular basis in exchange for access to the service or product. This type of agreement can be beneficial for...
Triple Top
What is the Triple Top Pattern and how can you spot it in the markets The triple top pattern is a bearish reversal pattern that can be found in charts of financial markets. The pattern is created by three successive peaks, with each peak being lower than the one before it. The triple top pattern signals that the buyers are...
Regulation SHO
What is Regulation SHO and what does it do Regulation SHO is a set of regulations promulgated by the SEC in 2005 that are designed to crack down on illegal naked short selling. Naked short selling is the practice of selling a security without first borrowing it or making arrangements to do so. This can artificially depress the price of...
Free Look Period
Cancelling Insurance During the Free Look Period Many consumers wonder if they can cancel their insurance policy during the free look period. This period usually lasts anywhere from 10 to 30 days, depending on the insurance policy. However, some agents may try to drag it out, preventing cancellation. Term insurance plans are subject to medical tests and stamp duty expenses....
Merger Arbitrage
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 the two companies will eventually converge as the deal progresses towards completion. By buying the shares of the company being...
Relative Value
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 to another. For example, if you were to compare the relative value of two stocks, you would look at how...
Pork Barrel Politics
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, pork barrel politics are rampant. Let's examine a few of them. Here's a look at three of the worst. Despite...
Accumulated Other Comprehensive Income
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. AOCI can be found on the balance sheet under the heading "Shareholders' Equity." While AOCI is not directly related to...
Channel Stuffing
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 undermine financial goals. The consequences of channel-stuffing are numerous. Here are some things to keep in mind when channel-stuffing is...