Category: Investments glossary

A no-load fund is a mutual fund in which shares are sold without a commission or sales charge. This absence of fees occurs because the shares are distributed directly by the investment company, instead of going through a secondary party. This absence of a sales charges is the opposite of a load fund—either front-load or back-load—which charges a commission at the time of the fund’s purchase or sale. Also, some mutual funds are level-load funds where fees continue for as long as the investor holds the fund. read more

The money supply is all the currency and other liquid instruments in a country’s economy on the date measured. The money supply roughly includes both cash and deposits that can be used almost as easily as cash.

Mean-variance analysis is the process of weighing risk, expressed as variance, against expected return. Investors use mean-variance analysis to make decisions about which financial instruments to invest in, based on how much risk they are willing to take on in exchange for different levels of reward. Mean-variance analysis allows investors to find the biggest reward at a given level of risk or the least risk at a given level of return.

Wire rooms are facilities used by financial institutions to process fund transfers and order requests on behalf of clients. Typical tasks performed by wire room staff include receiving trade orders from brokers and other registered representatives, transmitting those orders to the exchange floor or the firm’s trading department, and relaying notices of executed trade orders back to the brokers involved.

World insurance is a commercial liability policy with extended global coverage. World insurance provides coverage in the event the policyholder is sued anywhere in the world. In general, however, commercial liability policies have a geographic limit for coverage. It is common for companies with global operations or who have contracts with international partners/associates to purchase this type of world coverage.

Binomial distribution is a probability distribution that summarizes the likelihood that a value will take one of two independent values under a given set of parameters or assumptions. The underlying assumptions of the binomial distribution are that there is only one outcome for each trial, that each trial has the same probability of success, and that each trial is mutually exclusive, or independent of each other.

The Fed balance sheet is a breakdown of the assets and liabilities held by the Federal Reserve. In the United States, the Federal Reserve is the central bank founded by Congress in 1913 to ensure the stability and safety of the nation’s financial and monetary structures. The Fed balance sheet is a report that essentially outlines the factors that affect both the supply and the absorption of Federal Reserve funds. The Fed balance sheet report reveals the means the Fed uses to inject cash into the economy. The report is formally known as the Factors Affecting Reserve Balances. read more

A lagging indicator is any measurable or observable variable that moves or changes direction after a change has occurred in a target variable of interest. Lagging indicators confirm trends and changes in trends. They can be useful for gauging the trend of the general economy, as tools in business operations and strategy, or as signals to buy or sell assets in financial markets.

A lagging indicator is any measurable or observable variable that moves or changes direction after a change has occurred in a target variable of interest. Lagging indicators confirm trends and changes in trends. They can be useful for gauging the trend of the general economy, as tools in business operations and strategy, or as signals to buy or sell assets in financial markets.

Business activities include any activity a business engages in for the primary purpose of making a profit. This is a general term that encompasses all the economic activities carried out by a company during the course of business. Business activities, including operating, investing and financing activities, are ongoing and focused on creating value for shareholders.