What is Big Data in Finance? Big data in finance refers to large, diverse (structured and unstructured) and complex sets of data that can be used to provide solutions to long-standing business challenges for financial services and banking companies around the world. The term is no longer just confined to the realm of technology but…
What is Churning? Churning can be defined as the practice of executing trades for a customer’s investment account by a broker or brokerage firm for the sole purpose of generating commission from the account. It occurs when a broker engages in excessive buying and selling of securities in a customer’s account that is unnecessary to…
What is Autonomous Consumption? Autonomous consumption refers to the expenditures that a consumer needs to make, regardless of their income level. Certain goods and services must be purchased even when an individual is broke or with little to no disposable income. They include goods such as food, shelter (rent and mortgage), and hygiene products, and…
What is a Middle Income Country (MIC)? The term Middle Income Country (MIC) is used by the World Bank Group to refer to nation-states with a per capita Gross National Income (GNI) within a predetermined bandwidth. The MIC categorization enables the World Bank to analyze and determine specific policy prescriptions for countries within the category….
Who is a Middleman? A middleman plays the role of an intermediary in a distribution or transaction chain who facilitates interaction between the involved parties. Middlemen specialize in performing crucial activities involved in the purchase and sale of goods in their flow from producers to the ultimate buyers. They typically do not produce anything but…
What is an NFO? An NFO (new fund offer) is a call for investors made by an asset management company (AMC) to invest money into a new fund. An AMC is an enterprise that collects money from different clients and places the funds into different investment opportunities, like equity stocks and real estate. AMCs generally…
What is Risk Tolerance? Risk tolerance refers to the amount of loss an investor is prepared to handle while making an investment decision. Several factors determine the level of risk an investor can afford to take. Knowing the risk tolerance level helps investors plan their entire portfolio and will drive how they invest….
What is a Multi-Factor Model? A multi-factor model is a combination of various elements or factors that are correlated with asset returns. The model uses said factors to explain market equilibrium and asset prices. In multi-factor models, different factors are associated with certain characteristics (such as risk), and it helps determine the weight or importance…
What is Negative Growth? Negative growth implies a decline in value over a stated period. It is commonly observed in economic, industry, and business analysis. Typically, negative growth is expressed as a percentage over a period of time. Negative Growth in an Economic Context A country’s economy can experience negative growth when its gross domestic…
What is Net Income After Tax (NIAT)? Net income after tax (NIAT) is an entity’s profits after deducting all expenses and taxes in a fiscal period. NIAT is also commonly referred to as a company’s bottom-line profitability. How to Calculate Net Income After Tax? Calculating net income after tax involves deducting all expenses and costs…
