What is Expected Value? Expected value (also known as EV, expectation, average, or mean value) is a long-run average value of random variables. It also indicates the probability-weighted average of all possible values. Expected value is a commonly used financial concept. In finance, it indicates the anticipated value of an investment in the future. By determining…
What is Net Current Asset Value Per Share (NCAVPS)? Net Current Asset Value Per Share, or NCAVPS for short, is a financial metric for evaluating the attractiveness of a stock. It is a term pioneered by American economist, investor, and professor, Benjamin Graham, who is widely considered the “Father of Value Investing.” Therefore, NCAVPS is…
What is Net Change? Net change is the difference between the closing price of a prior trading period and the closing price of the current trading period for a financial security. Net change is generally used for stock prices, bond prices, mutual funds, derivative products, and other tradeable securities. The net change usually refers to…
What is Central Tendency? Central tendency is a descriptive summary of a dataset through a single value that reflects the center of the data distribution. Along with the variability (dispersion) of a dataset, central tendency is a branch of descriptive statistics. The central tendency is one of the most quintessential concepts in statistics. Although it…
What is the Average Age of Inventory? The average age of inventory represents the average number of days that pass before a company sells its inventory balance. It is an important working capital efficiency metric that is also referred to as days’ inventory on hand (DOH). How to Calculate the Average Age of Inventory The…
What is a Vendor Take-Back Mortgage? A vendor take-back mortgage refers to a type of mortgage in which the buyer of a property obtains a loan from the seller to secure the sale of the property. It is also referred to as a seller take-back mortgage. Vendor take-back mortgages provide benefits to both the seller…
What are Independent Events? In statistics and probability theory, independent events are two events wherein the occurrence of one event does not affect the occurrence of another event or events. The simplest example of such events is tossing two coins. The outcome of tossing the first coin cannot influence the outcome of tossing the second coin….
What is the Nominal Effective Exchange Rate (NEER)? The nominal effective exchange rate (NEER) is a form of measuring a currency’s nominal exchange rate relative to a basket of other currencies using an unadjusted weighted-average calculation. NEER is also sometimes referred to as the “trade-weighted currency index.” NEER may be adjusted to account for the…
What are Mutually Exclusive Events? In statistics and probability theory, two events are mutually exclusive if they cannot occur at the same time. The simplest example of mutually exclusive events is a coin toss. A tossed coin outcome can be either head or tails, but both outcomes cannot occur simultaneously. Mutually exclusive events are commonly…
