What is Homoskedastic? Homoskedastic is the situation in a regression model in which the residual term for each observation is constant for all observations. It essentially means that as the value of the dependent variable changes, the error term does not vary much for each observation. However, when the residual term’s size differs across an…
What are Homogeneous Expectations? Homogeneous expectations is a subjective belief, entrenched in the Modern Portfolio Theory (MPT) proposed by American economist Harry Markowitz, and postulates that all investors have the same expectations and arrive at similar conclusions. The assumption states that investors are rational in their decisions, resulting in homogeneous investment strategies. It applies to…
What is Homo Economicus? Homo economicus is a theoretical abstraction that portrays humans as rational and full of self-interest, and who pursue their well-being to the fullest in all transactions. The economic man is described as one who uses rational judgment to avoid unnecessary work. The rationality described in homo economicus is considered the cornerstone…
What is a Homestead Exemption? A homestead exemption refers to a legal provision designed to protect the family home from the reach of certain classes of creditors or to prevent circumstances that result from the homeowner’s death or alienation by the owner without the spouse’s consent. The principal objective of homestead exemptions is to act…
What is the Homeowners Protection Act of 1998? The Homeowners Protection Act of 1998 is a law that establishes provisions for mandatory cancellation and termination of private insurance on residential mortgage loans under certain circumstances. The legislation, also known as the PMI Cancellation Act, protects borrowers who use their primary homes as collateral from paying…
What are Homeowners Association Fees? A homeowners association fee is a periodic fee paid by homeowners living in a homeowners association community to help with maintenance and improvement of the property, amenities, and common areas. The fee varies across homeowners associations, and the amount levied on homeowners depends on the services provided and the community’s…
What is Horizontal Analysis? Horizontal analysis is an approach used to analyze financial statements by comparing specific financial information for a certain accounting period with information from other periods. Analysts use such an approach to analyze historical trends. Trends or changes are measured by comparing the current year’s values against those of the base year….
What is Horizontal Channel? A horizontal channel is a trend line that connects the variable pivot highs and lows to highlight the price movements during a trading period. Otherwise known as a sideway trend or price range, horizontal lines are used by traders for identify breakouts to determine where price action is decisive. Channels are…
What is Exempt Income? Exempt income refers to any income that is exempt from taxation. The rules and regulations that govern exempt income vary from country to country – and even by locale within a country. However, they are created as different types of incentives and breaks to foster certain types of growth and economic…
What is an Exempt Transaction? Exempt transactions are securities transactions that are exempt from registration requirements, either in part or in full, outlined in the 1933 Securities Act. The 1933 Securities Act was enacted after the Great Depression in the United States to bring regulation and transparency to the U.S. markets to help avoid extreme…
