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…
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…
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…
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…
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…
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…
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…
What is Explicit Writing? Explicit writing is a fundamental technique in business writing. It is essentially the creation of statements that explain their purpose and leave the reader with a clear and concise understanding of the context of a statement. Learning to ask “why” when putting a statement into a report, email, or any informative…
What is a Subscription Agreement? A subscription agreement is a formal agreement between a company and an investor to buy shares of a company at an agreed-upon price. The subscription agreement contains all the required details. It is used to keep track of outstanding shares and share ownership (who owns what and how much) and…
What is a Sublease? A sublease is a lease between the original lessee of a property to another third party. A sublease arrangement makes the original property tenant now a landlord of sorts. In such arrangements, the lessee is still responsible to the landlord for all the rent and lease payments. However, the third party…
