What is an Employee Stock Purchase Plan (ESPP)? An employee stock purchase plan (ESPP) refers to a stock program that allows participating employees to purchase their organization’s stock at a discounted price. In some cases, organizations offer stock discounts as high as 15%. Rather than directly purchasing their organization’s stock, participating employees contribute to their…
What is the Economic Calendar? The economic calendar displays the scheduled release dates of information related to the economy that significantly impacts the financial markets. The financial markets are a news-driven supply and demand vehicle; therefore, the release of significant news or economic events will drive price movements in the market. Many investors and traders…
What is Serial Correlation? Serial correlation is a statistical term used to describe the relationship – specifically, the correlation – between the current value of a variable and a lagged value of the same variable from earlier time periods. Serial correlation, also referred to as autocorrelation, is often used by financial analysts to predict future…
What is Shadow Pricing? Shadow pricing is the practice of assigning a monetary value to an item, commodity, or service that is not ordinarily bought and sold in any marketplace. Because no actual price can be assigned by trading in a market, the true value is unknown and can only be estimated. The estimation is…
What is the Shadow Banking System? The shadow banking system is the broad collection of financial institutions and financial markets that offer the same type of services as commercial banks but that are not within the regulatory environment that traditional banks are subject to. Elements of the shadow banking system include mortgage lending companies, repurchase agreements,…
What is a Share Certificate? A share certificate is an investment instrument that is very much like a certificate of deposit (CD). There are two primary differences between share certificates and certificates of deposit. The first is that CDs are offered by banks, while share certificates are only offered through credit unions. The…
What is the Service Sector? The service sector is the sector of the economy that produces and offers services. According to the tri-sector macroeconomic theory, there are three major economic sectors – primary, secondary, and tertiary. Major Economic Sectors 1. Primary Sector The primary sector is composed of industries engaged in the business of gathering…
What is the Long-Run Supply? The long-run supply is the supply of goods available when all inputs are variable. It means that in the long run, all property, plant, and equipment expenditure is variable. Furthermore, in the long run, the number of producers in the market is not fixed. Therefore, new firms will enter the…
What is Short-Run Supply? The short-run is the time period in which at least one input is fixed – generally property, plant, and equipment (PP&E). An increase in demand can only be met by increasing the usage of variable factors of production. Therefore, short-run supply is the supply given the firm’s investment in fixed assets….
What is the MSCI Emerging Markets Index? The MSCI Emerging Markets Index is used to measure the stock market performance within emerging countries. Established in the 1960s, It is one of many indexes created by Morgan Stanley Capital International (MSCI). The index captures mid to large-cap companies across over 12 emerging countries. It also represents…
