Month: November 2020

The Asia-Pacific Economic Cooperation (APEC), is an economic group of 21 members, formed in 1989, with the primary goal of promoting free trade and sustainable development in the Pacific Rim economies. The creation of APCE was primarily in response to the increasing interdependence of Asia-Pacific economies. Also, the proliferation of regional economic blocs, such as the European Union (EU) and the, now defunct, North American Free Trade Area (NAFTA), encouraged its formation.

In statistics, the p-value is the probability of obtaining results as extreme as the observed results of a statistical hypothesis test, assuming that the null hypothesis is correct. The p-value is used as an alternative to rejection points to provide the smallest level of significance at which the null hypothesis would be rejected. A smaller p-value means that there is stronger evidence in favor of the alternative hypothesis.

A trust indenture is an agreement in a bond contract made between a bond issuer and a trustee that represents the bondholder’s interests by highlighting the rules and responsibilities that each party must adhere to. It may also indicate where the income stream for the bond is derived from.

A short put refers to when a trader opens an options trade by selling or writing a put option. The trader who buys the put option is long that option, and the trader who wrote that option is short. The writer (short) of the put option receives the premium (option cost), and the profit on the trade is limited to that premium.

A kangaroo bond is a type of foreign bond issued in the Australian market by non-Australian firms and is denominated in Australian currency. The bond is subject to the securities regulations of Australia. A kangaroo bond is also known as a matilda bond.

Double entry, a fundamental concept underlying present-day bookkeeping and accounting, states that every financial transaction has equal and opposite effects in at least two different accounts. It is used to satisfy the accounting equation:

A debtor in possession (DIP) is a person or corporation that has filed for Chapter 11 bankruptcy protection, but still holds property to which creditors have a legal claim under a lien or other security interest. A DIP may continue to do business using those assets, but is required to seek court approval for any actions that fall outside of the scope of regular business activities. The DIP must also keep precise financial records, insure any property, and file appropriate tax returns.

Convexity is a measure of the curvature, or the degree of the curve, in the relationship between bond prices and bond yields. Convexity demonstrates how the duration of a bond changes as the interest rate changes. Portfolio managers will use convexity as a risk-management tool, to measure and manage the portfolio’s exposure to interest rate risk.

‘Hit the bid’ is a buzzword used to describe an event where a trader agrees to sell at a bid price quoted by another trader. The bid-offer (or bid-ask) quote is controlled by a broker, or market maker, who collects commission based on the bid-offer spread.

Economic stimulus is action by the government to encourage private sector economic activity by engaging in targeted, expansionary monetary or fiscal policy based on the ideas of Keynesian economics. The term economic stimulus is based on an analogy to the biological process of stimulus and response, with the intention of using government policy as a stimulus to elicit a response from the private sector economy. Economic stimulus is commonly employed during times of recession. Policy tools often used to implement economic stimulus include lowering interest rates, increasing government spending, and quantitative easing, to name a few. read more