Mean Reversion
What is Mean Reversion? Mean reversion is a theory implying that asset prices and historical returns gradually move towards the long-term mean, which can be based on the economy, industry, or average return within a set of data. The greater the deviation from their mean, the higher probability that the next movement of asset prices…
Nonconforming Mortgage
What is a Nonconforming Mortgage? A nonconforming mortgage is a loan for a home that does not follow government-sponsored enterprise (GSE) guidelines. GSE guidelines tend to include maximum loan amounts, downpayment requirements, credit requirements, and more. As the loans do not follow the above requirements and are more difficult to sell, they tend to be…
Voting Trust Certificate
What is a Voting Trust Certificate? A voting trust certificate is a document used to give temporary voting control over a corporation to one or several individuals. It is issued to a shareholder and represents the normal rights of any other stockholder, such as receiving quarterly dividends in exchange for their common shares. The only…
Earnings Report
What is an Earnings Report? An earnings report is an official financial document issued by a public company that shows expenses, earnings, and overall profit of the company for a certain period. The earnings report can also be called the income statement or profit and loss (P&L) statement. Investors can analyze the earnings report of…
Real Estate Owned (REO)
What is Real Estate Owned (REO)? Real estate owned (REO) is a bank-owned property that failed to sell at a foreclosure auction. When homeowners fail to pay their mortgages, they can either sell their property immediately and offer the sale proceeds to the bank or give it up to the bank for foreclosure. Foreclosure refers…
Bull vs Bear
What is Bull vs. Bear? The term “bull vs. bear” denotes the ensuing trends in stock markets – whether they are appreciating or depreciating in value – and what is the investors’ outlook about the market in general. A bull market indicates a sustained increase in price, whereas a bear market denotes sustained periods of…
Power Query
What is Power Query? Power Query is a tool used to manipulate data and is commonly used to transform data for business intelligence projects. High quality analysis relies on well-organized data that is free from errors and that draws data from a single source of truth. While many analysts spend hours of time manipulating data,…
Extrinsic Value
What is Extrinsic Value? Extrinsic value of an option is calculated by taking the difference between the market price of an option (also called the premium) and its intrinsic price – the value of an options contract in relation to the underlying at expiration or if exercised. In other words, it is determined by factors…
Sharia Law
What is Sharia Law? Sharia law is a religious law that lays down governing principles for spiritual, mental, and physical behavior that must be followed by Muslims. Regarded as God’s command for Muslims, Sharia law is essentially Islam’s legal system. The four primary sources of Sharia Law are: The Quran – The Holy Book conveys…
