LS FAZE 2

Understand the terms

  • Dollarization
    • Source :
    • Investopedia
    • Frequency :
    • Monthly Revisions
    • Description :
    • Official or unofficial use a foreign country's currency as legal tender for conducting transactions. The main reason for dollarization is because of greater stability in the value of the foreign currency over domestic currency. The downside of dollarization is that the country gives up its right to influence its own monetary policy by adjusting the money supply. For example, the citizens of a country with an economy undergoing rampant inflation may choose to use a historically stable currency (like the U.S. dollar) to conduct day-to-day transactions, because inflation will cause their domestic currency to have reduced buying power in a relatively short amount of time. Dollarization does not always involve the U.S. dollar as the adopted foreign currency. The euro has also been adopted by non-EU members as its domestic currency.
  • Future Value
    • Source :
    • Investopedeia
    • Frequency :
    • Monthly Revision
    • Description :
    • Future value (FV) refers to a method of calculating how much the present value (PV) of an asset or cash will be worth at a specific time in the future. For example, Bob invests $1,000 for five years with an interest rate of 10%. The future value would be $1,500
  • Present Value
    • Source :
    • Investorpedia
    • Frequency :
    • Monthly Revision
    • Description :
    • Present value describes how much a future sum of money is worth today.Thus, Le 6,139.13 will be worth Le 10,000 in 10 years if you can earn 5% each year. In other words, the present value of Le 10,000 in this scenario is Le 6,139.13.
  • Market Risk
    • Source :
    • Finance Dictionary
    • Frequency :
    • Monthly Revision
    • Description :
    • Market Risk is also referred to as systematic risk or non-diversifiable risk, is the fluctuation of returns caused by the macroeconomic factors that affect all risky assets. Market risk is comprised of the “unknown unknowns” that occur as a result of everyday life. It is unavoidable in all risky investments. It can also be thought of as the opportunity cost of putting money at risk.
  • Portfolio Management
    • Source :
    • Investment Professional
    • Frequency :
    • Monthly Revsion
    • Description :
    • The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance.
  • Capital Markets
    • Source :
    • Morning Star
    • Frequency :
    • Monthly Revision
    • Description :
    • The capital markets are a source of financing for companies around the world. The most famous of the capital markets are the stock market and bond market.Companies utilize capital markets to raise money for projects by issuing stock IPOs, bonds and short-term money market securities. Individual investors wish to earn interest or dividends on their savings can meet companies looking to raise funds by issuing securities.
  • Gross Earning
    • Source :
    • Barrons
    • Frequency :
    • Monthly Revision
    • Description :
    • Also called gross income, gross earnings are income before taxes or adjustments. In the accounting world, gross earnings are usually the same thing as gross profit (that is, revenue minus cost of goods sold).Let's assume restaurant chain XYZ sold $1 million worth of food last year. The cost of that food was $330,000. Thus, the company's gross earnings are $1 million - $330,000 = $670,000.
  • Purchasing Power
    • Source :
    • Principles of Economics
    • Frequency :
    • Monthly Revision
    • Description :
    • Purchasing power describes the quantity of goods or services that a money can buy. A decrease in purchasing power is called inflation. Assume Le 100 bought a gallon of Kerosene in 1987. Today, Le 100 buys a pint. This is an example of the change in the purchasing power of the Leone. Two general theories explain decreases in purchasing power. The first, the demand-pull theory - prices increase when demand for goods and services exceeds their supply. The second, the cost-push theory - companies create inflation when they raise their prices to cover higher supply prices and maintain profit margins.
  • Investments
    • Source :
    • Yahoo Financial Education
    • Frequency :
    • Monthly Revision
    • Description :
    • An investment is an asset intended to produce income or capital gains.Investments can be stocks, bonds, mutual funds, interest-bearing accounts, land, derivatives, real estate, jewelry or anything an investor believes will produce income (usually in the form of interest or rents) or become worth more.
  • Annuities
    • Source :
    • Finance Dictionary
    • Frequency :
    • Monthly Revision
    • Description :
    • An annuity is a financial contract written by an insurance company that provides for a series of guaranteed payments, either for a specific period of time or for the lifetime of one or more individuals. An annuity is similar to a life insurance product, but there are important differences between the two. Under the terms of a life insurance policy, the insurer will generally make a payment upon the death of the insured. Under the terms of an annuity, the company makes its payments during the lifetime of the individual. In addition, unless the annuity contract specifies a beneficiary, most annuity payments cease upon the death of the recipient.
  • Bonds
    • Source :
    • Finance Market
    • Frequency :
    • Monthly Revision
    • Description :
    • A bond, also known as a fixed-income security, is a debt instrument created for the purpose of raising capital. They are essentially loan agreements between the bond issuer and an investor, in which the bond issuer is obligated to pay a specified amount of money at specified future dates. There are four major bond types which are represented by four major issuers: Corporate, Government(Treasury), Agency, Municipal. When an investor purchases a bond, they are "loaning" that money (called the principal) to the bond issuer, which is usually raising money for some project. When the bond matures, the issuer repays the principal to the investor. In most cases, the investor will receive regular interest payments from the issuer until the bond matures.
  • Earnings Per Share
    • Source :
    • Barrons
    • Frequency :
    • Monthly Revision
    • Description :
    • The term earnings per share (EPS) represents the portion of a company's earnings, net of taxes and preferred stock dividends, that is allocated to each share of common stock. The figure can be calculated simply by dividing net income earned in a given reporting period (usually quarterly or annually) by the total number of shares outstanding during the same term. Because the number of shares outstanding can fluctuate, a weighted average is typically used. Assume that during the fourth quarter, Company XYZ reported net income of $4 million. During the same time frame, the company had a total of 10 million shares outstanding. In this particular case, the company's quarterly earnings per share (or EPS) would be $0.40, calculated as follows:$4 million / 10 million shares = $0.40
  • Stock Symbol
    • Source :
    • Investopedia
    • Frequency :
    • Monthly Revision
    • Description :
    • A stock symbol - also known as a ticker symbol, is a string of letters used to identify a stock, bond, mutual fund, ETF or other security traded on an exchange. Example the stock symbol for the Sierra Rutlie is SRX. London Mining is LOND
  • Gross Domestic Product (GDP)
    • Source :
    • Bureau of Economic Analysis (BEA)
    • Frequency :
    • Quarterly Revision
    • Description :
    • GDP is a comprehensive measure of the economic health of the nation. It is the broadest quantitative measure of a nation's total economic activity. GDP specifically represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time.
  • Shares
    • Source :
    • Barrons
    • Frequency :
    • Monthl Revision
    • Description :
    • Shares are units of ownership in stocks and partnerships.The unit of ownership of a company is usually referred to as a "share." The owners of shares are called "shareholders." The distribution of shares in a company indicates the distribution of ownership in the company.
  • Initial Public Offering IPO
    • Source :
    • Barrons
    • Frequency :
    • Monthly Revision
    • Description :
    • An initial public offering (IPO) refers to the first time a company publicly sells shares of its stock on the open market. It is also known as "going public." The proceeds from the sale of stock shares in an initial public offering provide the issuing company with capital. For this reason, many start-up companies issue IPOs because they're seeking a source of capital to fund growth.IPOs are introduced to the market by an underwriting investment bank, which aids the issuing company by soliciting potential investors. In addition, the underwriter helps the issuing company to settle on the price at which the stock should be offered to investors.IPOs represent the first time an issuing company will financially benefit from the public sale of its stock. Following the IPO, shares trade between buyers and sellers on the open market, whereby the underlying company receives no compensation.
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