Financial Glossary

  • Treasuries

    What are Treasuries? Treasuries are the common name for the United States Treasury securities. These are government debt instruments issued to finance the national debt of the US, the equivalent of British gilts or German bunds. US Treasuries are considered…

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  • Fiscal Policy

    What is fiscal policy? Fiscal policy refers to ways of using government revenue collection, namely taxes, and spending it with the aim of influencing the economy. By altering the levels of taxation and public expenditure, a government’s goal is to…

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  • Swap

    What is a swap? A swap is a derivative in which two parties exchange financial instruments, in most cases involving cash flows between them. These cash flows are calculated over a notional principal amount. Each cash flow is commonly referred…

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  • Defensive Stock

    What is a defensive stock? A defensive stock is a type of stock that generates a constant dividend and stable earnings independently of the state of the stockmarket performance. Defensive stocks are typical of firms that produce or distribute consumer…

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  • Correlation

    What is correlation? In the finance and investment industries, correlation is a statistic that measures the degree to which two securities move in relation to each other. Correlation is computed into what is known as the correlation coefficient, which has…

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  • Deleverage

    What is deleveraging? Deleveraging is when a firm or individual aims to decrease its total financial leverage. The simplest way for achieving deleverage is to pay off any existing debt on its balance sheet. When this is not possible, the…

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  • Short Selling

    What is a short in finance? In finance, short selling, shorting or going short is the practice of selling any financial instruments or securities without owning them, and subsequently repurchasing them after their price decline, obtaining profits off the price…

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  • Private Equity

    What is private equity and how does it work? In finance, a private equity is a way of raising investment capital from high net worth individuals and institutions for the purpose of investing and acquiring equity ownership in companies. A…

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  • Credit Rating

    What is a credit rating? A credit rating is a way of measuring the likelihood of a prospective debtor paying back a debt.  In practice, it represents an evaluation of the creditworthiness of the debtor and the risk of defaulting….

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  • Contracts For Difference

    What is a CFD trade? In finance, a contract for difference, or CFD, is a type of financial derivative that allows traders to profit from movements in asset prices. Speculations on prices moving up are known as long positions, and…

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