What is a U-Shaped Recovery? A U-shaped recovery is a form of economic recovery where the recession portion typically lasts for several quarters with a slow return to growth. It is measured by economic indicators like GDP, inflation, employment levels, and industrial output. A U-shaped recovery occurs when the economy goes through a recession with…
What is the Project Life Coverage Ratio (PLCR)? The project life coverage ratio (PLCR) refers to a financial ratio that is used to determine the repayment ability of a project’s cash flows to its debt obligations. Lenders set a minimum PLCR to constrain the borrower’s maximum loan amount, thus reducing the risk of default. Understanding…
What is a Prediction Market? A prediction market or betting market is an exchange-traded market where individuals can bet on the outcome of a variety of events with an unknown future. The events range from future commodity prices, yearly revenue results of a company, exchange rates, etc. A well-known public prediction market, Predictlt, predicts the…
What are Money and Time Weighted Returns? In many areas of finance, where investors and other stakeholders often make decisions based on profitability and returns, it’s critical to accurately assess how well investments, investment strategies, and portfolios are performing. A key skill for this assessment is being able to calculate what is called the “weighted…
What is Money Supply? Money supply refers to the cash and cash equivalents in a country at a given point in time. It is an important measurement for monetary policy decision-making because money supply is a key variable that drives macroeconomic performance. Understanding Money Supply Monetary supply aggregates are the formal breakdown and measurement of…
What is Money Market Yield? The money market yield is the yield earned from investing in liquid, short-term debt securities with less than one year maturity. Money market instruments include Treasury bills (T-bills), short-term guaranteed investment certificates (GICs), banker’s acceptances, commercial papers, short-term mortgages, and more. Understanding Money Market Yield The diagram above illustrates the…
How to Make a PowerPoint Presentation A PowerPoint presentation is a very powerful tool to convey information to an audience. It is often used in lectures and business meetings as it provides visualized messages. Here are the basic steps for beginners to create a PowerPoint presentation from scratch. Create a Presentation When opening PowerPoint, it…
How is Currency Valued? Currency value is determined like any other good or service in a market economy – through supply and demand. Factors affecting supply and demand are regulated by the government through monetary and fiscal policy. History of Currency Value Currency came around several hundreds of years ago as a means to replace…
What is Interest Rate Sensitivity? Interest rate sensitivity is the analysis of fixed income security price fluctuations to changes in the market interest rate. The higher the security’s interest rate sensitivity, the greater the price fluctuations. Understanding Interest Rate Sensitivity Fixed income is one of the major asset classes available to investors. Investors profit from…
What is an Inflationary Gap? In economics, an inflationary gap refers to the positive difference between the real GDP and potential GDP at full employment. The concept was invented by John Maynard Keynes to help identify the economy’s position in the business cycle. Understanding Inflationary Gap An inflationary gap requires two common macroeconomic variables: GDP…
