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…
What is an Inflation Swap? An inflation swap is a derivative contract between two counterparties to transfer inflation risk by exchanging fixed cash flows. The mechanics involve one party paying fixed payments, while the other makes payments based on the floating rate on an inflation index. Understanding Inflation Swaps Inflation swaps are a type of…
What is a Qualifying Transaction? A qualifying transaction is a transaction where a private Canadian company issues public stock via a capital pool company. The capital pool company is created to purchase all of the outstanding shares of the private Canadian company; in doing so, the private Canadian company becomes a subsidiary of the capital…
What is Pari-Passu? Pari-passu is a Latin term that means “ranking equally and without preference.” Applied in a legal context, pari-passu means that multiple parties to a contract, claim, or obligation are treated the same, “ranking equally and without preference.” Uses and Applications of the Pari-Passu Principle Lending The term pari-passu is popular in the…
