In countries that use value-added tax (VAT), zero-rated goods are products that are exempt from that value taxation. Examples of items that may be zero-rated include certain foods and beverages, exported goods, donated goods sold by charity shops, equipment for the disabled, prescription medications, water, and sewage services, books and other printed publications, and children’s clothing.
Milton Friedman was an American economist and statistician best known for his strong belief in free-market capitalism. During his time as a professor at the University of Chicago, Friedman developed numerous free-market theories that opposed the views of traditional Keynesian economists. In his book A Monetary History of the United States, 1867-1960, Friedman illustrated the role of monetary policy in creating and arguably worsening the Great Depression.
A sampling distribution is a probability distribution of a statistic obtained from a larger number of samples drawn from a specific population. The sampling distribution of a given population is the distribution of frequencies of a range of different outcomes that could possibly occur for a statistic of a population.
The Heikin-Ashi technique averages price data to create a Japanese candlestick chart that filters out market noise. Heikin-Ashi charts, developed by Munehisa Homma in the 1700s, share some characteristics with standard candlestick charts but differ based on the values used to create each candle. Instead of using the open, high, low, and close like standard candlestick charts, the Heikin-Ashi technique uses a modified formula based on two-period averages. This gives the chart a smoother appearance, making it easier to spots trends and reversals, but also obscures gaps and some price data.
A government bond is a debt security issued by a government to support government spending and obligations. Government bonds can pay periodic interest payments called coupon payments. Government bonds issued by national governments are often considered low-risk investments since the issuing government backs them.
The Klinger oscillator was developed by Stephen Klinger to determine the long-term trend of money flow while remaining sensitive enough to detect short-term fluctuations. The indicator compares the volume flowing through securities with the security’s price movements and then converts the result into an oscillator. The Klinger oscillator shows the difference between two moving averages which are based on more than price. Traders watch for divergence on the indicator to signal potential price reversals. Like other oscillators, a signal line can be added to provide additional trade signals.
Also known as a hindsight option, a lookback option allows the holder the advantage of knowing history when determining when to exercise their option. This type of option reduces uncertainties associated with the timing of market entry and reduces the chances the option will expire worthlessly. Lookback options are expensive to execute, so these advantages come at a cost.
Windfall profits are large, unexpected gains resulting from lucky circumstances. Such profits are generally well above historical norms and may occur due to factors such as a price spike or supply shortage that are either temporary in nature or longer-lasting. Windfall profits are generally reaped by an entire industry sector but can also find their way to an individual company.
Greenmail is the practice of buying enough shares in a company to threaten a hostile takeover so that the target company will instead repurchase its shares at a premium. Regarding mergers and acquisitions, the greenmail payment is made as a defensive measure to stop the takeover bid. The target company is forced to repurchase the stock at a substantial premium to thwart the takeover, which results in a lucrative profit to the greenmailer.
Over the top (OTT) refers to film and television content provided via a high-speed Internet connection rather than a cable or satellite provider. Viewers who dislike paying for bundled content are often referred to as cord cutters. OTT does not mean free, as the term encompasses services such as Netflix, Amazon, iTunes and HBO Now.