What is the Financial Sector? Key Roles and Institutions The financial sector refers to the businesses and institutions that manage money and provide intermediary services to transfer and allocate financial capital in an economy. Understanding the Financial Sector Every business expansion, home purchase, and investment depends on a financial regulatory framework that moves money efficiently….
What is Domain Knowledge (Data Science)? In data science, the term domain knowledge is used to refer to the general background knowledge of the field or environment to which the methods of data science are being applied. Data science, as a discipline, can be thought of as the study of tools used to model data,…
Who was John Maynard Keynes? John Maynard Keynes (1883-1946) was an English economist who was the founder of Keynesian economics. His father, John Neville Keynes, was also an economist and a lecturer at King’s College, Cambridge. His mother was a social reformer who was one of the first female graduates of King’s College Born in…
What is Hazard Insurance? Hazard insurance is a type of insurance coverage that is a part of homeowners insurance. It offers protection for damages incurred on your property as a result of natural or man-made disasters, which include fires, storms, lightning, or other hazards. Getting hazard insurance coverage means that you are covered for financial…
What is Flotation? Flotation is the process of issuing and selling shares to public investors. In other words, it is when a company goes public and issues new shares to raise capital. It is a term commonly used in the United Kingdom. Floating a company allows it to raise capital for the purpose of acquiring…
What is an Index-Linked Bond? An index-linked bond is used to protect the income earned by bond investors against inflation. Index-linked bonds are linked to a country’s inflation index. For example, the U.K. issues index-linked bonds called linkers that are linked to the Retail Price Index (RPI). Similarly, Canada issues Real Return Bonds (RRBs) that…
What is the FOMC Dot Plot? The FOMC (Federal Open Market Committee) dot plot, alternatively called the Fed’s dot plot, is a chart that summarizes the FOMC’s outlook for the federal funds rate. It is published quarterly and watched closely by investors and economists for indications on the future trajectory of the federal funds rate….
What is the Fed Beige Book? The Fed Beige Book, also referred to as the “Summary of Commentary on Current Economic Conditions,” is a qualitative report outlining current U.S. economic conditions across the 12 Federal Reserve districts. It is published eight times a year by the U.S. Federal Reserve. Understanding the Purpose of the Fed…
What is a Frothy Market? A frothy market, a common Wall Street jargon, refers to a market condition where asset prices are notably detached from their true intrinsic value. Simply put, a frothy market is a market that is exhibiting unsustainable rapid price appreciation. If unresolved, it precedes a market bubble and a subsequent market…
What is a Hard Stop? A hard stop is an instruction from a client to their broker which informs them to sell units of a security when the market price declines to a specific level. Hard stops are used to minimize risk and reduce potential losses in the financial market when price fluctuations and unexpected…
