Market Maker
What is a Market Maker? Market maker refers to a firm or an individual that engages in two-sided markets of a given security. It means that it provides bids and asks in tandem with the market size of each security. A market maker seeks to profit off of the difference in the bid-ask spread and...
Market Manipulation
What is Market Manipulation? Market manipulation refers to artificial inflation or deflation of the price of a security. Also known as price manipulation or stock manipulation, it involves the literal manipulation of a financial market for personal gain. It means influencing the behavior of the securities with the intent to do so. Market manipulation can...
Bank Reserves
What are Bank Reserves? Bank reserves are the minimum cash reserves that financial institutions must keep in their vaults at any given time. The minimum cash reserve requirements for financial institutions in each country are set by the central bank of that country. For example, the Federal Reserve is responsible for setting the requirements for...
Fiduciary Duty
What is Fiduciary Duty? Fiduciary duty is the responsibility that fiduciaries are tasked with when dealing with other parties, specifically in relation to financial matters. In most cases, it means that the duties involve a fiduciary overseeing the wealth of their clients, acting on the client’s behalf, and in their best interests. What is a...
Time Period Bias
What is Time Period Bias? Time period bias is a sampling error caused by selecting observations that only cover a certain time period (i.e., a certain set of circumstances or factors). Time period bias may lead to inaccurate results since the conclusions obtained from using a sample suffering from the bias may be uniquely specific...
