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Glossary

Glossary

The economic markets overflow with complicated terms. Get a quick overview on the most common terms investors use to navigate the markets. Discover the ins and outs of macroeconomics through terms like GDP, forex and more.

Glossary

Loan Loss Provision

What Is A Loan Loss Provision? A loan loss provision is an amount of money a bank charges to its expenses on its income statement in anticipation that some of…

Glossary

Animal Spirits

What Are Animal Spirits? "Animal spirits" is a term coined by the British economist John Maynard Keynes to describe emotional or "gut" instincts by investors and businesspeople to take risks…

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Glossary

Junk Bonds

What Is A Junk Bond? Junk bonds are debt securities issued by corporations with poor credit ratings, which means they yield more than investment-grade bonds because of their greater risk…

Glossary

Yield Spread

What Is Yield Spread? The yield spread is the difference in yield between two different bonds. Investors use the yield spread to measure the relative value of two different securities,…

Glossary

CAPE Ratio

What Is The CAPE Ratio? The cyclically-adjusted price-to-earnings (CAPE) ratio is a variation on the standard price-to-earnings (PE) ratio that seeks to determine if stocks are in a bubble. While…

Glossary

Wall Of Worry

What Is The Wall Of Worry? The "wall of worry" refers to a tendency in financial markets for stocks to rise in the face of seemingly difficult or insurmountable problems.…

Glossary

Asset-Backed Security

What Is An Asset-Backed Security? Asset-backed securities (ABS) are fixed-income instruments similar to bonds that are collateralised by a pool of loans, the payments on which are channeled to the…

Glossary

Reserve Currency

What Is A Reserve Currency? A reserve currency is a currency that is widely accepted around the world as a method of payment between countries for goods and services. Reserve…

Glossary

Target Date Funds

What Is A Target Date Fund? A target date fund is a mutual fund designed for retirement that automatically rebalances the fund's assets as the investors in the fund draw…

Glossary

The Glass-Steagall Act

The Glass-Steagall Act was a 1933 U.S. law signed by President Franklin Roosevelt shortly after he took office that effectively separated commercial banking from investment banking. The act is named…

Glossary

Keynesian Economics

What Is Keynesian Economics? Keynesian economics is an economic theory that argues that governments should spend heavily on infrastructure projects and unemployment benefits during economic downturns in order to stimulate…

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