Month: July 2020

Procyclic describes a state where behavior and actions of a measurable product or service move in tandem with the cyclical condition of the economy.

A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. According to neoclassical theory, mixed economies are less efficient than pure free markets, but proponents of government interventions argue that the base conditions required for efficiency in free markets, such as equal information and rational market participants, cannot be achieved in practical application. read more

A high beta index is a basket of stocks that exhibit greater volatility than a broad market index like the S&P 500. The S&P 500 High Beta Index is the most well-known of these indexes. It tracks the performance of 100 S&P 500 companies that are most sensitive to changes in market returns. Beta by definition is the amount of volatility or systematic risk, an asset exhibits compared to the market as a whole. Besides the flagship large-cap index, Standard and Poor’s (S&P) offers high beta variations of small-cap, mid-cap, and emerging markets to name a few. read more

Covariance measures the directional relationship between the returns on two assets. A positive covariance means that asset returns move together while a negative covariance means they move inversely. Covariance is calculated by analyzing at-return surprises (standard deviations from the expected return) or by multiplying the correlation between the two variables by the standard deviation of each variable.

A surplus describes the amount of an asset or resource that exceeds the portion that’s actively utilized. A surplus can refer to a host of different items, including income, profits, capital, and goods. In the context of inventories, a surplus describes products that remain sitting on store shelves, unpurchased. In budgetary contexts, a surplus occurs when income earned exceeds expenses paid. A budget surplus can also occur within governments when there’s leftover tax revenue after all governmental programs are fully financed. read more

OTC options are exotic options that trade in the over-the-counter market rather than on a formal exchange like exchange traded option contracts.

Just compensation refers to the compensation individuals receive when their property gets seized by the government for public use. For example, when the national highway system was constructed in the 1950s, many homeowners had their property seized because the government needed the land to build the interstate highway system.

Previously known as Series 55, Series 57 is an exam and license administered by the Financial Industry Regulatory Authority (FINRA). Also known as the Securities Trader Representative Exam, it is required for individuals looking to be a securities trader representative. These individuals can trade equity and convertible debt securities.

A vertical well is a borehole that is aimed directly at a target beneath it. A vertical well does not have a truly vertical borehole, but it is more or less aimed straight down at a reservoir of oil or gas rather than being turned horizontally at a designated point. Historically, natural gas and oil exploration involved the use of vertical wells because directional drilling technology was expensive and complicated.

Gift causa mortis is a gift of personal property made with the expectation that the person giving the gift will soon die.