Paired Shares
What is 'Paired Shares' The stock of two separate companies that are under the management or supervision of a single corporation. Paired shares are traded as if they are one stock and are sold as one unit. The stock of both companies typically appears on one stock certificate, with each stock printed on one side of the...
Macaulay Duration
What is The 'Macaulay Duration' The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the price. Macaulay duration is frequently used by portfolio managers who use an immunization strategy. Explaining...
PL Statement
Source: WikipediaLast Sourced: 2021-02-01This Article has been Edited for Accessibility Further Reading Financial ratios as a means of forecasting bankruptcy - www.jstor.org Testing a model of Islamic corporate financial reports: some experimental evidence - journals.iium.edu.my Method for teaching economics, management and accounting - patents.google.com Predicting the near term profit and loss statement with an econometric model: A feasibility...
Tail Risk
DefinitionTail risk is the additional risk of an asset or portfolio of assets moving more than 3 standard deviations from its current price, above the risk of a normal distribution. Prudent asset managers are typically cautious with tail risk involving losses which could damage or ruin portfolios, and not the beneficial tail risk of outsized gains. Tail Risk ...
Nakahara Prize
DefinitionThe Nakahara Prize is an annual award given by the Japanese Economic Association to Japanese economists under the age of 45 whose work has gained international recognition. The prize was created in 1995, and named after its sponsor Nobuyuki Nakahara. The aim of the prize is honoring and encouraging young economists to publish internationally well-recognized papers and books. In...
GDP Gap
DefinitionThe GDP gap or the output gap is the difference between actual GDP or actual output and potential GDP. The calculation for the output gap is Y–Y where Y is actual output and Y* is potential output. If this calculation yields a positive number it is called an inflationary gap and indicates the growth of aggregate demand is outpacing...
Obligation Bond
What is 'Obligation Bond' A municipal bond used to secure a mortgage on property or other physical assets that can be liquidated. The face value of the bond is greater than the value of the property itself. Explaining 'Obligation Bond' An obligation bond creates a personal obligation on the part of the borrower to compensate...
M1 – Money Supply
The money supply has different components and M1 is the measure of the component that includes the physical money held by public. It is the asset individuals or businesses can directly use for investment or for making payments of any kind. M1 includes coins, currency, NOW, checking amounts, and assets that can be quickly converted into physical money. It...
M0
What is 'M0' M0 is a measure of the money supply which combines any liquid or cash assets held within a central bank and the amount of physical currency circulating in the economy. In the United Kingdom, the M0 supply is also referred to as narrow money. Explaining 'M0' M0 (M-zero) is the most...
Creative Destruction In Economics
Creative destruction, sometimes called Schumpeter's gale, is an idea people studying economics theory say may lead to innovation in the business cycle. Karl Marx argued the devaluation of wealth in periods when capitalism is going through a financial crisis is an inevitable outcome of its wealth creation processes. During the 1950s, the Austrian economist Joseph Schumpeter built on and...