What is the KBW Bank Index? The KBW Bank Index serves as a benchmark that is used to track the performance of leading banking institutions and publicly-traded assets in the United States. The KBW Index comprises 24 banking equities/stocks that represent regional banks, thrift institutions, and/or national money centers in the United States. Hence, the…
What is a High-Speed Data Feed? A high-speed data feed refers to a fast real-time market data-providing service. It facilitates high-frequency trading and algorithmic trading. Taking advantage of fast-growing information technology and strong computing power, a high-speed data feed can execute trades and update data several times faster than the traditional data feed does. It…
What is a Highly Compensated Employee? Highly compensated employees refer to the employees who own more than 5% of the interest in a business or receive compensation above a certain amount determined by the Internal Revenue Service (IRS). Highly compensated employees are differentiated from non-highly compensated employees for 401(k) retirement plan purposes. Understanding Highly Compensated…
What is Financial Performance? Financial performance is a complete evaluation of a company’s overall standing in categories such as assets, liabilities, equity, expenses, revenue, and overall profitability. It is measured through various business-related formulas that allow users to calculate exact details regarding a company’s potential effectiveness. For internal users, financial performance is examined to determine…
What is the Exponentially Weighted Moving Average (EWMA)? The Exponentially Weighted Moving Average (EWMA) is a quantitative or statistical measure used to model or describe a time series. The EWMA is widely used in finance, the main applications being technical analysis and volatility modeling. The moving average is designed as such that older observations are…
What is a Contingency? A contingency is the chance occurrence that a future event is likely to cause a negative impact on an organization or person. It is a condition or a probable future event occurring by chance, deliberately or not. In addition, its occurrence and the resulting effects will necessitate special or extraordinary measures…
What is the Fast Stochastic Indicator? The fast stochastic indicator (%K) is a momentum technical indicator that aims to measure the trend in prices and identify trend reversals. The indicator was developed by securities trader and technical analyst George Lane. The indicator is driven by two parameters: the lookback period and the smoothing parameter. The…
What is Material Requirements Planning (MRP)? Material requirements planning (MRP) is an inventory management system that is completely operated digitally through a wide variety of computer-based platforms. MRP is exclusively designed to improve the inventory efficiency of a business by estimating quantities of raw material and scheduling timely deliveries. In addition, the material requirements planning…
What is Agency Theory? Agency theory is a concept used to explain the important relationships between principals and their relative agent. In the most basic sense, the principal is someone who heavily relies on an agent to execute specific financial decisions and transactions that can result in fluctuating outcomes. Because the principal relies so heavily…
What is a Financial Instrument? Financial instruments are contracts for monetary assets that can be purchased, traded, created, modified, or settled for. In terms of contracts, there is a contractual obligation between involved parties during a financial instrument transaction. For example, if a company were to pay cash for a bond, another party is obligated…
