What is Documentary Collection? Documentary collection is a procedure that allows a seller to give their bank instructions to forward trade-related documents to the bank of a buyer. The instructions are normally accompanied by a request for the documentation to be presented to the buyer for payment. The request and instructions include the terms and…
What is a Distribution Network? A distribution network can be seen as the flow of goods from a producer or supplier to an end consumer. The network consists of storage facilities, warehouses, and transportation systems that support the movement of goods until they reach the end consumer. The process of ensuring the consumer receives the…
What is Delta Hedging? Delta hedging is a trading strategy that reduces the directional risk associated with the price movements of an underlying asset. The hedge is achieved through the use of options. Ultimately, the objective is to reach a delta neutral state, offsetting the risk on the portfolio or option. How Delta Hedging Works…
What is Demand Theory? Demand theory is a principle that emphasizes the relationship between consumer demand and the price for goods and services within a market. It can also be illustrated as the demand curve, which is downwards sloping in a horizontal manner, as the price of the good decreases as quantity increases. Vice-versa, where…
What is the Dependency Ratio? The dependency ratio compares the number of dependent individuals by age to the total population. Specifically, it measures people between the ages of 0 to 14 and above 65 to those who are 15 to 64. By doing so, it separates those who can and cannot work, which can indicate…
What is the Half-Year Convention for Depreciation? The half-year convention for depreciation assumes fixed assets have been in service for one-half of its first year despite when it was actually acquired. This rule is applied by tax authorities to restrict the maximum allowable claim for depreciation to one half of the annual amount. The other…
What is a Hard Currency? A hard currency refers to a currency that is generally issued by developed countries, globally traded, and seen as politically and economically stable. International investors put their confidence and trust in hard currencies because they will not dramatically depreciate or appreciate (fluctuate in relative value to other currencies). For the…
What is the Hanging Man Candlestick? The “hanging man” is a bearish financial candlestick pattern that represents a potential reversal in an uptrend. In particular, a hanging man pattern forms at the end of an uptrend. Due to the uptrend reaching its peak, a reversal is likely to occur. The hanging man candlestick pattern is…
