What is Inflation Accounting? Inflation accounting is used during times of increasing or plummeting prices in certain areas of the world, usually with respect to multinational corporations and their financial reporting. Most often, it is seen in countries with high inflation. As a result, some accounting standards boards and countries permit or require the companies…
What is the Industrial Revolution? The Industrial Revolution started around 1760 and ended between 1820 and 1840. It originally began in Europe and slowly shifted over to the United States in the early 1800s. The latter half of the 18th century saw massive changes in the production of goods. Manufacturers were turning away from hand…
What are Cloud Services? Cloud services are a range of IT applications and resources that include software, infrastructure, and platforms hosted by third-party providers and delivered on-demand to organizations and individual customers through the internet. They can also be referred to as cloud computing; hence the words can be used interchangeably. Cloud services rely on…
What is an Interest Rate Floor? An interest rate floor is the lower range of rates that is agreed upon, when a floating rate loan product is purchased from a lending institution. They are also found in many derivative products and are often used when calculating and projecting risk. When traders or borrowers seek to…
What are Interest Rate Options? Interest rate options are a type of derivative that is based on the value of interest rates. They are generally tied to interest rate products like Treasury notes. Interest rate options are generally traded on exchanges like the CME Group and are packaged as different types of products. There are…
What is an Interest Rate Collar? An interest rate collar is a specialized option that can be used to hedge against shifts in the interest rate. It provides a barrier for traders who utilize them by providing a ceiling for rising rates and a floor for declining rates. When creating an interest rate collar, a…
What is an Interest Rate Differential (IRD)? An interest rate differential is a charge that applies if a borrower pays off the entirety of the mortgage before its maturity date. Most mortgages that are given at major lending institutions charge either the interest rate differential or three months of payment interest. Generally, a lender will…
What is an Interest Rate Call Option? An interest rate option is a derivative whose contract value is based on interest rates. There are two types of interest rate options, calls and puts. An interest rate call option gives the individual who holds the option to profit off of a rise in interest rates. When…
What is Business Intelligence vs. Data Science? Business intelligence (BI) and data science are both data-focused processes, but there are some key differences between the two. In general, business intelligence focuses on analyzing past events, while data science aims to predict future trends. Data science requires a more technical skill set compared to business intelligence. What…
What is Input-Output Analysis? Input-output analysis is a type of economic model that describes the interdependent relationships between industrial sectors within an economy. It shows how the outputs of one sector flow into another sector as inputs. Wassily Leontief, who was a Soviet-American economist, developed the input-output analysis method, earning him the Nobel Prize in…
