Capitalization-Weighted Index
What is the Capitalization-Weighted Index? The Capitalization-Weighted Index (cap-weighted index, CWI) is a type of stock market index in which each component of the index is weighted relative to its total market capitalization. In a capitalization-weighted index, companies with larger market capitalization exert a greater impact on the index value. Companies with a smaller market...
Commodities
What are Commodities? Commodities are another class of assets, just like stocks and bonds. Most commodities are products that come from the earth that possess uniform quality, are produced in large quantities, and are produced by many different producers. Major commodities include cotton, oil, gas, corn, wheat, oranges, gold, and uranium. Basically, they are the...
Cross Border Listing
What is Cross Border Listing? Cross border listing involves companies that trade on the stock exchange of their home country and also on a stock exchange in another country. A Cross Border Listing gives rise to the possibility of arbitrage opportunities, as identical assets are trading in two different markets. Cross border listed companies are...
Put Option
What is a Put Option? A put option is an option contract that gives the buyer the right, but not the obligation, to sell the underlying security at a specified price (also known as strike price) before or at a predetermined expiration date. It is one of the two main types of options, the other...
Revenue Bond
What is a Revenue Bond? A revenue bond is a type of municipal bond in which the repayment of the obligation is primarily guaranteed by the operating revenues of an entity. Revenue bonds are primarily utilized by government entities to subsidize infrastructure projects. The most common projects include the construction of airports, roads, bridges, and...
