Month: December 2020

Organizational behavior (OB) is the academic study of the ways people act within groups. Its principles are applied primarily in attempts to make businesses operate more effectively.

An asset swapped convertible option transaction (ASCOT) is a structure in which an option on a convertible bond is used to separate a convertible bond into its two components. The components being separated are the bond with its regular coupon payments and the equity option that functions as a call option. The ASCOT structure allows an investor to gain exposure to the option within the convertible without taking on the credit risk represented by the bond.

Uncovered interest arbitrage is a form of arbitrage that involves switching from a domestic currency that carries a lower interest rate to a foreign currency that offers a higher rate of interest on deposits. There is a foreign exchange risk implicit in this transaction since the investor or speculator will need to convert the foreign currency deposit proceeds back into the domestic currency some time in the future. The term uncovered in this arbitrage refers to the fact that this foreign exchange risk is not covered through a forward or futures contract. read more

An order paper, or order instrument, is a negotiable instrument that is payable to a specified person or its assignee. An instrument such as an order paper is negotiable only if it is payable to the order of a specified person.

An equity-efficiency tradeoff results when maximizing the productive efficiency of a market leads to a reduction in its equity—as in how equitably its wealth is distributed. The debate around the tradeoff often focuses on addressing growing economic inequality within a country or region where the economy and GDP are growing. The concern for some is that the least affluent members of society receive a disproportionately small share of the increasing wealth. Academic discussion of equity-efficiency revolves in part around whether equity and efficiency are always inversely related or whether they can both rise at once. read more

Annual turnover is the percentage rate at which a mutual fund or an exchange-traded fund (ETF) replaces its investment holdings on a yearly basis. Portfolio turnover is the comparison of assets under management (AUM) to the inflow, or outflow, of a fund’s holdings. The figure is useful to determine how actively the fund changes the underlying positions in its holdings.

An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.

Investor relations (IR) is a key department in many medium-to-large public companies. Investor relations provides investors with an accurate account of company affairs. This helps private and institutional investors make informed decisions on whether to invest in the company.

A limit order is a type of order to purchase or sell a security at a specified price or better. For buy limit orders, the order will be executed only at the limit price or a lower one, while for sell limit orders, the order will be executed only at the limit price or a higher one. This stipulation allows traders to better control the prices they trade. By using a buy limit order, the investor is guaranteed to pay that price or less. While the price is guaranteed, the filling of the order is not, and limit orders will not be executed unless the security price meets the order qualifications. If the asset does not reach the specified price, the order is not filled and the investor may miss out on the trading opportunity. read more

A Bollinger Band® is a technical analysis tool defined by a set of trendlines plotted two standard deviations (positively and negatively) away from a simple moving average (SMA) of a security’s price, but which can be adjusted to user preferences.