A leveraged buyout (LBO) is a financial transaction in which a company is acquired primarily using borrowed funds, with the acquired company’s assets often serving as collateral for the loans. Table of Contents What Is LBO? A leveraged buyout (LBO) occurs when the buyer of a company takes on a significant amount of debt as […]
A blue chip is a stock of a well-established corporation with a reputation for reliability, quality, and financial stability. Table of Contents What Is Blue Chip Stocks? Blue chip companies are large, sound, and stable, with a significant market presence. Many traders and investors prefer blue chip stocks because they are stable and pay rising
A time when stock prices are declining and market sentiment is pessimistic. Generally, a bear market occurs when a broad market index falls by 20% or more over at least a two-month period. Table of Contents What Is Bear Market? A bear market is a financial term used to describe a drop of over 20%
The grey market refers to the trading of goods, securities, or services that occurs outside the officially sanctioned distribution channels but is not illegal Table of Contents What Is Grey Market? The grey market refers to trading goods, securities, or services outside the officially sanctioned distribution channels but is not illegal. In the financial context,
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is a widely used financial metric that provides a snapshot of a company’s operational performance. It can be seen as a loose proxy for cash flow from the entire company’s operations. Table of Contents What Is EBITDA? EBITDA(Earning Before Interest Tax Depreciation and Amortization) is a measure of
The modern portfolio theory is a mathematical model/investment theory that allows investors to create asset portfolios that maximizes expected based for for a given level of risk. Table of Contents What Is Modern Portfolio Theory (MPT) The modern portfolio theory is a mathematical model/investment theory that allows investors to create asset portfolios that maximizes expected
Equity risk premium is the excess return that investing in the stock market provides over a risk-free rate. The excess return is due to the additional risk taken by investors when investing in equities Table of Contents What Is Equity Risk Premium? The equity risk premium is the difference between the returns on individual stocks and
Hypothesis testing is a statistical method used to determine whether there is enough evidence in a sample of data to support or reject a proposed hypothesis about a population parameter Table of Contents What Is Hypothesis Testing? Hypothesis testing is a statistical method for making a decision based on experimental data. Hypothesis testing is essentially
The expected annual return on a bond, assuming it makes all interest payments and repays the original principal, is known as the yield to maturity. Table of Contents What Is Yield to Maturity? YTM or yield-to-maturity is a term used very closely with bonds. It is the internal rate of return (IRR) of an investment in
The bid-ask spread represents the gap between the highest price a buyer is prepared to pay for an asset and the lowest price a seller is willing to accept. Table of Contents What Is Bid-Ask Spread? A bid-ask spread is the difference between the highest price a buyer is willing to pay for an asset
