Derivatives are financial instruments whose value is derived from the value of an underlying asset. They are used for various purposes, including speculation, hedging or to shift risk. Table of Contents What Is a Derivative? The term “derivative” refers to a financial contract whose value is determined by on an underlying asset, a group of […]
An index is a statistical measure that tracks the performance of a group of assets, such as stocks, bonds, or commodities, that represent a particular market or sector. It enables investors to identify market trends and compare performance. Table of Contents What Is An Index? An index is a tool used to measure the performance
Creator: Massimo Giachetti | Credit: Getty Images Inflation rose as expected in November according to fresh Consumer Price Index (CPI) data, which was in line with expectations at 2.7%, a 0.3% month-over-month rise. Experts are quoting this headline as “frustrating” but not alarming, while some investors widely expect the US central bank to cut borrowing
The cost of capital is the minimum return a company must earn on its investments to satisfy its investors and maintain its market value. Table of Contents Cost of Capital is the minimum required return that investors expect for providing capital to the business, whether through equity, debt, or a combination of both. The cost
An Initial Public Offering (IPO) is the process by which a private company offers its shares to the public for the first time to raise capital by selling equity. Table of Contents What is an IPO? An IPO, or initial public offering, is the term for the first time that a private company sells shares
The P/E ratio (Price-to-Earnings ratio) measures a company’s stock price relative to its earnings per share (EPS). It shows how much investors are willing to pay for each unit of earnings, often used to assess valuation. Table of Contents What Is the Price-to-Earnings (P/E) Ratio? The Price-to-Earnings (P/E) Ratio is a financial metric that compares a
Options is a financial contract that gives you the right, but not the obligation, to buy or sell an asset (like a stock) at a specific price, within a certain time period. Table of Contents What Is Options? Options are financial derivatives which offer buyers the right, but not the obligation, to purchase or sell
Fair value is the estimated price at which an asset or liability would be exchanged between a willing buyer and seller in a neutral transaction under normal market conditions. Table of Contents What Is Fair Value? Fair value is a measure of an asset’s or liability’s worth based on its current market price or an
Short selling is an investment strategy where an investor borrows and sells a stock, aiming to buy it back later at a lower price to profit from the price decline. Table of Contents What is Short Selling? Short selling is an investment strategy in which an investor borrows shares of a stock and then sells
Net Asset Value (NAV) is the per-unit value of a mutual fund, calculated by dividing the fund’s total assets minus liabilities by the number of outstanding units. Table of Contents Net Asset Value (NAV) is a mutual fund’s or exchange-traded fund’s per-unit value. It is the market value of the fund’s assets minus its liabilities,
