Holding Company
What is a Holding Company? A holding company is a company that doesn’t conduct any operations, ventures, or other active tasks for itself. Instead, it exists for the purpose of owning assets. In other words, the company does not engage in the buying and selling of any products and services. Instead, it was formed so...
Average Return
What is an Average Return? Average return is the mathematical average of a sequence of returns that have accrued over time. In its simplest terms, average return is the total return over a time period divided by the number of periods. Average return, as in simple average, is calculated by adding a set of numbers...
Backward Integration
What is Backward Integration? Backward integration is a process in which a company acquires or merges with other businesses that supply raw materials needed in the production of its finished product. Businesses pursue backward integration with the expectation that the process will result in cost savings, increased revenues, and improved efficiency in the production process....
Joint-Stock Company
What is a Joint-Stock Company? A joint-stock company is a business that is owned by its investors. The shareholders buy and sell shares and own a portion of the company. The percentage of ownership is based on the number of shares that each individual owns. Shareholders can buy and sell shares and transfer shares between one...
Monetary Transmission Mechanism
What is Monetary Transmission Mechanism? The monetary transmission mechanism refers to the process through which monetary policy decisions affect economic growth, prices, and other aspects of the economy. The chart below illustrates a simplified monetary transmission mechanism, which will be further analyzed in this article. Central Bank Action Central banks throughout the world share similar...
