What is the Depository Trust Company (DTC)? The Depository Trust Company (DTC), a US-based corporation, is a central securities depository accepting deposits from over 65 countries. It provides book-entry and depository services, transfer and pledge of securities, operates a settlement system for securities, and also performs associated income distributions. The DTC enables record-keeping of balances…
What is Dilution? Dilution refers to the reduction in the percentage of existing shareholders’ ownership in a company when it issues new shares of stock. It is also referred to as equity or stock dilution. Dilution occurs when optionable securities, such as employee stock options, are exercised. How Dilution Works When a company goes public,…
What is the Directional Movement Index (DMI)? The Directional Movement Index (DMI) is an indicator that helps in determining the direction the asset price is moving and the strength of the price movement. It does so by comparing the current price with previous lows and highs, drawing lines of positive directional movement (+DI) and negative…
What is Portfolio Planning? Portfolio planning is the process of strategizing the construction of an investment portfolio. The investment portfolio should be encompassing of the investor’s risk tolerance, investment time horizon, and expected return of the portfolio. What is the Portfolio Planning Process? An investment manager is very unlikely to produce a good result for…
What is Noncumulative? Noncumulative refers to a type of preferred stock for which dividends are not accumulated over time. The company is not obliged to pay noncumulative stockholders any unpaid dividends. For example, if a company fails to pay dividends over two years and pays out in the third, noncumulative stockholders only have claims on…
What is Seasonality? Seasonality is a characteristic of data where there exist predictive fluctuations in a data set depending on the time of year. Many different things drive seasonality, and it occurs across various industries. One of the prominent industries in which seasonality occurs is the retail industry. There often exists seasonal cycles in consumer…
What is Perfect Competition? In a market with perfect competition, both producers and consumers are price-takers. Such a characteristic implies production and consumption decisions that individual producers and consumers face do not affect the market price of the good or service. A perfectly competitive market can be characterized as a market where there is an…
What is Sensex? Sensex, also known as the S&P BSE Sensex Index, is the benchmark index that tracks India’s Bombay Stock Exchange (BSE). The Sensex is composed of the 30 largest and most-traded stocks within the BSE, which ultimately measures India’s economic activity and performance. The Sensex Index is reviewed every six months, alternating between…
