James Tobin
Who is James Tobin? Born on March 5, 1918, James Tobin is an American economist who was awarded the Nobel Prize for his work and analysis of financial markets and how they relate to production, prices, expenditure decisions and budgeting, and employment. Mr. Tobin focused on Keynesian economics, and his most prominent work was on…
Experience Curve
What is the Experience Curve? Introduced by the Boston Consulting Group, Experience Curve is a concept that states that there is a consistent relationship between the cumulative production quantity of a company and the cost of production. The concept implies that the more experienced a company is in manufacturing a specific product, the lower its…
Fixed Costs
What are Fixed Costs? Fixed costs are a type of expense or cost that remains unchanged with an increase or decrease in the volume of goods or services sold. They are often time-related, such as interest or rents paid per month, and are often referred to as overhead costs. They are important to attaining more…
Forward Price
What is Forward Price? Forward price refers to the predetermined and agreed upon price of an underlying asset in a forward contract. It is also known as the forward rate. A forward contract refers to an agreement between parties to buy or sell an underlying asset on an agreed-upon date and price. The underlying asset…
Reverse Cash and Carry Arbitrage
What is Reverse Cash and Carry Arbitrage? Reverse cash and carry arbitrage is the inverse of the cash and carry arbitrage commodity trading strategy. Like cash and carry arbitrage, it is a market-neutral strategy that seeks to take advantage of market inefficiencies between a commodity’s spot price and its future price. In the reverse cash…
Help-Wanted Index (HWI)
What is the Help-Wanted Index (HWI)? The help-wanted index (HWI), originally developed by the Conference Board, tracks the number of help-wanted advertisements in major national newspapers monthly. The HWI is used as a leading indicator of economic conditions. Currently, the HWI is not a commonly used indicator due to the growing use of the internet…
Held Order
What is a Held Order? A held order refers to a market order that should be executed promptly with no hesitation. When a trader receives instructions by way of a held order, implementation time is instant, as the order needs to be filled immediately. In financial markets jargon, it is called “hit the bid or…
Helicopter Money
What is Helicopter Money? Helicopter money, also known as a helicopter drop, refers to an unconventional monetary policy tool of printing large sums of money (expanding money supply) and distributing it to the public to spur economic growth during a recession. The term was invented by Milton Friedman, an American economist and statistician, in his…
Cash Flow Drivers
What are Cash Flow Drivers? Cash flow drivers are the components of a business evaluation model that drive a company’s cash flows. The elements help financial analysts forecast a company’s future cash flow and build a predictive valuation of a company. It is crucial to recognize and analyze all the relevant cash flow drivers for…
