Industry WIKI

The equity premium puzzle refers to the inability of an important class of economic models to explain the average equity risk premium (ERP) provided by a diversified portfolio of equities over that of government bonds, which has been observed for more than 100 years. There is a significant disparity between returns produced by stocks compared to returns produced by government treasury bi

Equity risk is "the financial risk involved in holding equity in a particular investment." Equity risk is a type of market risk that applies to investing in shares. The market price of stocks fluctuates all the time, depending on supply and demand. The risk of losing money due to a reduction in the market price of shares is known as equity risk.

Equity sharing is another name for shared ownership or co-ownership. It takes one property, more than one owner, and blends them to maximize profit and tax deductions. Typically, the parties find a home and buy it together as co-owners, but sometimes they join to co-own a property one of them already owns. At the end of an agreed term, they buy one another out or sell the property and sp

An escrow is a contractual arrangement in which a third party (the stakeholder or escrow agent) receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties. Examples include an account established by a broker for holding funds on behalf of the broker's principal or some other person until

Event-driven investing or Event-driven trading is a broad term encompassing hedge fund investment strategies that seeks to exploit pricing inefficiencies that may occur before or after an event. Examples of such events could be an earnings call, bankruptcy, merger, acquisition, or spinoff. In more recent times market practitioners have expanded this definition to include additional event

An exchange, bourse (), trading exchange or trading venue is an organized market where people can buy and sell financial instruments, such as tradable securities, commodities, foreign exchange and derivative contracts.

An exchange-traded fund (ETF) is a type of investment fund that is also an exchange-traded product; i.e., it is bought and sold on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, cryptocurrency, debt, and futures contracts, as well as commodities such as gold bars. ETFs provide more diversification than owning an individual stock and more market liquidity th

The expected return (or expected gain) on a financial investment is the expected value of its return (of the profit on the investment). It is a measure of the center of the distribution of the random variable that is the return. It is calculated by using the following formula:

Expected shortfall (ES) is a risk measure—a concept used in the field of financial risk measurement to evaluate the market risk or credit risk of a portfolio. The "expected shortfall at q% level" is the expected return on the portfolio in the worst

An experience economy is the sale of memorable experiences to customers. The term was first used in a 1998 article by B. Joseph Pine II and James H. Gilmore describing the next economy following the agrarian economy, the industrial economy, and the most recent service economy.

Extreme value theory or extreme value analysis (EVA) is the study of extremes in statistical distributions.

Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors. For example, it is possible that variations in six observed variables mainly reflect the variations in two unobserved (underlying) variables. Factor analysis searches for such joint variations in response

Factor investing is an investment approach that targets measurable characteristics of securities, known as factors, which help explain differences in risk and return. Commonly studied equity factors include size, value, momentum, quality, and low volatility. Other characteristics sometimes used in factor-based strategies include asset growth, leverage, term, carry and liquidity.

In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilised amounts of the various inputs determine the quantity of output according to the relationship called the production function. There are four basic resources or factors of production: land, labour, capital and entrepreneur (or ente

False advertising is the act of publishing, transmitting, distributing or otherwise publicly circulating an advertisement containing a false claim or statement, to promote the sale of property, goods or services. A false advertisement can be classified as deceptive if the advertiser deliberately misleads the consumer, rather than making an unintentional mistake. A number of governments u

Fear, Uncertainty, and Doubt (FUD), or Fear, Uncertainty, Doubt, and Despair (FUDD), is a manipulative tactic used in sales, media, marketing, public relations, opinion polling, and cults. FUD is generally a strategy to influence by disseminating negative, dubious, and false information. FUD is "implicit coercion" by "any kind of disinformation used as a competitive weapon." It is a tact

The "Fed model", or "Fed Stock Valuation Model" (FSVM), is a disputed theory of equity valuation that compares the stock market's forward earnings yield to the nominal yield on long-term government bonds, and that the stock market – as a whole – is fairly valued, when the one-year forward-looking I/B/E/S earnings yield equals the 10-year nominal Treasury yield; deviations suggest over-or

The federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds

The Federation of Euro-Asian Stock Exchanges (FEAS) is a non-profit international organization comprising the main stock exchanges in Eastern Europe, the Middle East, and Central Asia. The purpose of the Federation is to contribute to the cooperation, development, support and promotion of capital markets in Eurasia, although membership in the Federation is open to markets internationally

In finance, Fibonacci retracement is a method of technical analysis for determining support and resistance levels. It is named after the Fibonacci sequence of numbers, whose ratios provide price levels to which markets tend to retrace a portion of a move, before a trend continues in the original direction.

Fictitious capital (German: fiktives Kapital) is a concept used by Karl Marx in his critique of political economy. It is introduced in chapter 25 of the third volume of Capital. Fictitious capital contrasts with what Marx calls "real capital", which is capital actually invested in physical means of production and workers, and "money capital", which is actual funds being held. The market

A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory body in order to provide advice.

Financial astrology (also known as business astrology, economic astrology, and/or astro-economics) is a pseudoscientific practice of relating the movements of celestial bodies to events in financial markets. The use of astrology in any context is not empirically based and its use in predicting financial markets is at plain odds with standard economic and financial theory.

Financial correlations measure the relationship between the changes of two or more financial variables over time. For example, the prices of equity stocks and fixed interest bonds often move in opposite directions: when investors sell stocks, they often use the proceeds to buy bonds and vice versa. In this case, stock and bond prices are negatively correlated.

Financial crime is any illegal activity involving money, finance or financial systems committed to secure personal or organizational gain. It includes crimes committed against property, involving the unlawful conversion of the ownership of property to one's own personal use and benefit. Financial crime covers a wide spectrum of illicit acts.

Financial deepening is a term used by economists to refer to increasing provision of financial services. It can refer both a wider choice of services and better access for different socioeconomic groups. Financial deepening can have an effect on both individuals' and societies' economic situations.

Financial econometrics is the application of statistical methods to financial data. Financial econometrics is a branch of financial economics, in the field of economics. Areas of study include capital markets, financial institutions, corporate finance and corporate governance. Topics often revolve around asset valuation of individual stocks, bonds, derivatives, currencies and other fina

Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on both sides of a trade".

Financial engineering is a multidisciplinary field involving financial theory, methods of engineering, tools of mathematics and the practice of programming. It has also been defined as the application of technical methods, especially from mathematical finance and computational finance, in the practice of finance.

Financial integration is a phenomenon in which financial markets in neighboring, regional and/or global economies are closely linked together. Various forms of actual financial integration include: Information sharing among financial institutions; sharing of best practices among financial institutions; sharing of cutting edge technologies (through licensing) among financial institutions;

Financial law is the law and regulation of the commercial banking, capital markets, insurance, derivatives and investment management sectors. Understanding financial law is crucial to appreciating the creation and formation of banking and financial regulation, as well as the legal framework for finance generally.

Financial literacy is the possession of skills, knowledge, behavior, and attitude that allow an individual to make informed decisions regarding money. Financial literacy, financial education, and financial knowledge are used interchangeably. Financially unsophisticated individuals cannot plan for their future because of their poor financial knowledge. Financially sophisticated individual

A financial market is a marketplace where the pricing and trade of securities, commodities, currency, derivatives, or other financial products takes place. The term may refer to a specific stock or commodity exchange, or to the general process by which relevant economic activity is organized and carried out.

Financial regulation is a broad set of policies that apply to the financial sector in most jurisdictions, justified by two main features of finance: systemic risk, which implies that the failure of financial firms involves public interest considerations; and information asymmetry, which justifies curbs on freedom of contract in selected areas of financial services, particularly those tha

Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financial loss and uncertainty about its extent.

Financial risk management is the practice of protecting economic value in a firm by managing exposure to financial risk - principally credit risk and market risk, with more specific variants as listed aside - as well as some aspects of operational risk. As for risk management more generally, financial risk management requires identifying the sources of risk, measuring these, and crafting

Financial risk modeling is the use of formal mathematical and econometric techniques to measure, monitor and control the market risk, credit risk, and operational risk on a firm's balance sheet, on a bank's accounting ledger of tradeable financial assets, or of a fund manager's portfolio value; see Financial risk management.

The fiscal theory of the price level is the idea that government fiscal policy, including debt and taxes present and future, is the primary determinant of the price level or inflation as opposed to the quantity theory of money. The theory is one of the strongest advocates in the debate among mainstream economists for combatting inflation primarily through fiscal policy instead of monetar

Fixed income is a type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. For example, the borrower may have to pay interest at a fixed rate once a year and repay the principal amount on maturity. Fixed-income securities (more commonly known as bonds) can be contrasted with equity securities (often referred to as stocks and

Fixed-income arbitrage is a group of market-neutral-investment strategies that are designed to take advantage of differences in interest rates between varying fixed-income securities or contracts (Jefferson, 2007). Arbitrage in terms of investment strategy, involves buying securities on one market for immediate resale on another market in order to profit from a price discrepancy.

Fixed-Income Relative-Value Investing (FI-RV) is a hedge fund investment strategy made popular by the failed hedge fund Long-Term Capital Management.

A flight-to-quality, or flight-to-safety, is a financial market phenomenon occurring when investors sell what they perceive to be higher-risk investments and purchase safer investments, such as gold and government bonds. This is considered a sign of fear in the marketplace, as investors seek less risk in exchange for lower profits.

A floor trader is a member of a stock or commodities exchange who trades on the floor of that exchange for their own account. The floor trader must abide by trading rules similar to those of the exchange specialists who trade on behalf of others. The term should not be confused with floor broker.

A focus group is a group interview involving a small number (sometimes up to twelve) of demographically predefined participants. Their reactions to specific researcher/evaluator-posed questions are studied. Focus groups are used in market research to better understand people's reactions to products or services or participants' perceptions of shared experiences. The discussions can be gui

In statistical mechanics and information theory, the Fokker–Planck equation is a partial differential equation that describes the time evolution of the probability density function of the position or velocity of a particle under the influence of drag forces and random forces, as in Brownian motion. The equation can be generalized to other observables as well. The Fokker–Planck equation h

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.

Foreign exchange risk (also known as FX risk, exchange rate risk or currency risk) is a financial risk that exists when a financial transaction is denominated in a currency other than the domestic currency of the company. The exchange risk arises when there is a risk of an unfavourable change in exchange rate between the domestic currency and the denominated currency before the date when

Foreign ownership refers to the ownership of a portion of a country's assets (businesses, natural resources, property, bonds, equity, etc.) by individuals who are not citizens of that country or by companies whose headquarters are not in that country.

Fractional-reserve banking is the system of banking under which banks that take deposits from the public keep only part of their deposit liabilities in liquid assets as a reserve, and lend a percentage to borrowers, thus increasing the money supply by the loaned amount. Bank reserves are held as cash in the bank or as balances in the bank's account at the central bank. Fractional-reserv

Frank Horace Hahn FBA (26 April 1925 – 29 January 2013) was a British economist whose work focused on general equilibrium theory, monetary theory, Keynesian economics and critique of monetarism. A famous problem of economic theory, the conditions under which money, which is intrinsically worthless, can have a positive value in a general equilibrium, is called "Hahn's problem" after him.

A free price system or free price mechanism (informally called the price system or the price mechanism) is a mechanism of resource allocation that relies upon prices set by the interchange of supply and demand. The resulting price signals communicated between producers and consumers determine the production and distribution of resources. Therefore the free price system rations supplies,

Front running, also known as tailgating, is the practice of entering into an equity (stock) trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large ("block") pending transaction that will influence the price of the underlying security. In essence, it means the use of knowledge of an impending trade to engage in a person

Full-reserve banking (also known as 100% reserve banking) is a system of banking where banks do not lend demand deposits and instead only lend from time deposits. It differs from fractional-reserve banking, in which banks may lend funds on deposit, while fully reserved banks would be required to keep the full amount of each customer's demand deposits in cash, available for immediate with

Fund governance refers to a system of checks and balances and work performed by the governing body (board) of an investment fund to ensure that the fund is operated not only in accordance with law, but also in the best interests of the fund and its investors. The objective of fund governance is to uphold the regulatory principles commonly known as the four pillars of investor protection

A "fund of funds" (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A fund of funds may be "fettered", meaning that it invests only in funds managed by the same investment company, or "unfettered", meaning that it can

Fundamental analysis, in accounting and finance, is the analysis of a business's financial statements (usually to analyze the business's assets, liabilities, and earnings); health; competitors and markets. It also considers the overall state of the economy and factors including interest rates, production, earnings, employment, GDP, housing, manufacturing and management. There are two bas

The fundamental theorems of asset pricing (also: of arbitrage, of finance), in both financial economics and mathematical finance, provide necessary and sufficient conditions for a market to be arbitrage-free, and for a market to be complete. An arbitrage opportunity is a way of making money with no initial investment without any possibility of loss. Though arbitrage opportunities do exis

Future value is the value of a current sum of money or stream of cash flows at a specified date in the future, given an assumed rate of return or interest rate. It reflects the time value of money, which holds that a sum of money has different value at different points in time because it can earn a return if invested.

The G20 developing nations (and, occasionally, the G21, G23 or G20+) is a bloc of developing nations established on 20 August 2003. Distinct and separate from the G20 major economies, the group emerged at the 5th Ministerial WTO conference, held in Cancún, Mexico, from 10 September to 14 September 2003. The group accounted for 60% of the world's population, 70% of its farmers and 26% of

Galloping inflation (also jumping inflation) is one that develops at a rapid pace (dual or triple-digit annual rates), perhaps only for a brief period. Such form of inflation is dangerous for the economy as it mostly affects the middle and low-income classes of population. Importantly, galloping inflation can precipitate an economic depression. Nevertheless, galloping inflation can still

George Selgin (; born February 15, 1957) is an American economist. Before retiring in July 2025, he was a Senior Fellow at the Cato Institute, the founding Director of its Center for Monetary and Financial Alternatives, and editor-in-chief of that Center's online publication, Alt-M. He is also Professor Emeritus of economics at the Terry College of Business at the University of Georgia,

Gharar (Arabic: غرر) literally means uncertainty, hazard, chance or risk. It is a negative element in mu'amalat fiqh (transactional Islamic jurisprudence), like riba (usury) and maisir (gambling).

The Gibraltar Stock Exchange (GSX) was a stock exchange based in Gibraltar, a British overseas territory. until its closure in 2023.

In United States history, the Gilded Age is the period from about the late 1870s to the late 1890s, which occurred between the Reconstruction era and the Progressive Era. It was named by 1920s historians after Mark Twain's 1873 novel The Gilded Age: A Tale of Today.

In probability theory, Girsanov's theorem or the Cameron-Martin-Girsanov theorem explains how stochastic processes change under changes in measure.

Global debt refers to the total amount of money owed by all sectors, including governments, businesses, and households worldwide.

Global labor arbitrage is an economic phenomenon where, as a result of the removal of or disintegration of barriers to international trade, jobs move to nations where labor and the cost of doing business (such as environmental regulations) are inexpensive and/or impoverished labor moves to nations with higher paying jobs.

Global macro trading is an investment strategy that leverages macroeconomic and geopolitical data to analyze and predict moves in financial markets. Large-scale or "macro" political and economic events can disproportionately impact certain sectors, such as the energy, commodity, and currency markets, over others. The strategy typically employs forecasts and analysis of interest rate tren

In business and finance, a golden share is a type of share of stock that lets its owner outvote all other shareholders in certain circumstances. Golden shares often belong to the government when a government-owned company is undergoing the process of privatization and transformation into a stock company.

In finance, the greater fool theory suggests that one can sometimes make money through speculation on overvalued assets (items with a purchase price drastically exceeding the intrinsic value) if those assets can later be resold at an even higher price.

In mathematical finance, the Greeks are the quantities (known in calculus as partial derivatives; first-order or higher) representing the sensitivity of the price of a derivative instrument, such as an option or future, to changes in one or more underlying parameters on which the value of an instrument or portfolio of financial instruments is dependent. The name is used because the most

The Greenspan put was a monetary policy that Alan Greenspan, during his tenure as chair of the Federal Reserve, exercised in response to financial crises. It was used for the first time with the crash of 1987. Though it was successful in addressing various crises, it became controversial as it led to periods of extreme speculation led by Wall Street investment banks overusing the put's r

In economics, Gresham's law, also Gresham-Copernicus Law (after Nicolaus Copernicus) is a monetary principle stating that "bad money drives out good". For example, if there are two coins in circulation containing metal of different value, which are accepted by law as having similar face value, the more valuable coin based on the inherent value of its component metals will gradually disap

The Group of Ten (G10 or G-10) refers to the group of 11 countries that agreed to participate in the General Arrangements to Borrow (GAB), an agreement to provide the International Monetary Fund (IMF) with additional funds to increase its lending ability.

Growth investing is a type of investment strategy focused on capital appreciation. Those who follow this style, known as growth investors, invest in companies that exhibit signs of above-average growth, even if the share price appears expensive in terms of metrics such as price-to-earnings or price-to-book ratios. In typical usage, the term "growth investing" contrasts with the strategy

In finance, a growth stock is a stock of a company that generates substantial and sustainable positive cash flow and whose revenues and earnings are expected to increase at a faster rate than the average company within the same industry. A growth company typically has some sort of competitive advantage (a new product, a breakthrough patent, overseas expansion) that allows it to fend off

The growth–share matrix (also known as the product portfolio matrix, Boston Box, BCG-matrix, Boston matrix, Boston Consulting Group portfolio analysis and portfolio diagram) is a matrix used to help corporations to analyze their business units, that is, their product lines.

Karl Gunnar Myrdal ( MUR-dahl, MEER-; Swedish: [ˈɡɵ̌nːar ˈmy̌ːɖɑːl]; 6 December 1898 – 17 May 1987) was a Swedish economist and sociologist. In 1974, he received the Nobel Memorial Prize in Economic Sciences along with Friedrich Hayek for "their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social a

In finance, a haircut is the difference between the current market value of an asset and the value ascribed to that asset for purposes of calculating regulatory capital or loan collateral. The amount of the haircut reflects the perceived risk of the asset falling in value in an immediate cash sale or liquidation. The larger the risk or volatility of the asset price, the larger the haircu

In probability theory and statistics, a Hawkes process is an age-dependent branching process driven by immigration from an inhomogeneous Poisson process. The process, named after Alan G. Hawkes, is also called a self-exciting point process., i.e., the occurrence of an event increases the likelihood of another event occurring. It has arrivals at times

On the technical analysis chart, the head and shoulders formation occurs when a market trend is in the process of reversal either from a bullish or bearish trend; a characteristic pattern takes shape and is recognized as reversal formation.

A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, gambles, many types of over-the-counter and derivative products, and futures contracts.

Heiner Flassbeck (born 12 December 1950) is a German economist and public intellectual. From 1998 to 1999 he was a State Secretary in the German Federal Ministry of Finance (German: Bundesministerium der Finanzen) where he also advised former finance minister Oskar Lafontaine on a reform of the European Monetary System. He became the Chief of Macroeconomics and Development of the United

High-frequency trading (HFT) is a type of algorithmic automated trading system in finance characterized by high speeds, high turnover rates, and high order-to-trade ratios that leverages high-frequency financial data and electronic trading tools. While there is no single definition of HFT, among its key attributes are highly sophisticated algorithms, co-location, and very short-term inve

In 1978 and 1979, lawyer and First Lady of Arkansas Hillary Rodham Clinton engaged in a series of trades of cattle futures contracts. Her initial $1,000 investment had generated nearly $100,000 (equivalent to $443,603.85 in 2025), when she stopped trading after ten months. In 1994, after Clinton had become First Lady of the United States, the trading became the subject of considerable co

Home equity is the homeowner's financial interest in their property, calculated as the difference between the property's current market value and the total outstanding balances of all loans secured by the home.

Horizontal integration is the process of a company increasing production of goods or services at the same level of the value chain, in the same industry. A company may do this via internal expansion or through mergers and acquisitions.

In finance, economics, and decision theory, hyperbolic absolute risk aversion (HARA) refers to a type of risk aversion that is particularly convenient to model mathematically and to obtain empirical predictions from. It refers specifically to a property of von Neumann–Morgenstern utility functions, which are typically functions of final wealth (or some related variable), and which des

Institutional Capital Network, Inc (doing business as iCapital) is an American fintech company that provides platform solutions related to alternative investments in the private markets.

Illicit financial flows, in economics, are a form of illegal capital flight that occurs when money is illegally earned, transferred, or spent. This money is intended to disappear from any record in the country of origin, and earnings on the stock of illicit financial flows outside a country generally do not return to the country of origin.

In finance, interest rate immunization is a portfolio management strategy designed to take advantage of the offsetting effects of interest rate risk and reinvestment risk.

Impact investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is about an alignment of an investor's beliefs and values with the allocation of capital to address social and/or environmental issues.

In economics, implicit contracts refer to voluntary and self-enforcing long term agreements made between two parties regarding the future exchange of goods or services. Implicit contracts theory was first developed to explain why there are quantity adjustments (layoffs) instead of price adjustments (falling wages) in the labor market during recessions.

An incentive is anything that persuades a person or organization to alter their behavior to produce a desired outcome. Incentives are widely studied in personnel economics, where researchers and human resource managers examine how firms use pay, career opportunities, performance evaluation, and other mechanisms to motivate employees and improve organizational outcomes. Higher incentives

An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees and in sales to attract and retain customers. Scientific literature also refers to this concept as pay for performance.

Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. For example, a person's income in an economic sense may be different from their income as defined by law.

In economics, incomplete markets are markets in which there does not exist an Arrow–Debreu security for every possible state of nature. In contrast with complete markets, this shortage of securities will likely restrict individuals from transferring the desired level of wealth among states.

India International Exchange IFSC Limited, also known as the India International Exchange (India INX), is India's first international stock exchange. It was launched as a subsidiary of the Bombay Stock Exchange (BSE). It is located at the International Financial Services Centre, GIFT City.

Individual capital, the economic view of talent, comprises inalienable or personal traits of persons, tied to their bodies and available only through their own free will, such as skill, creativity, enterprise, courage, capacity for moral example, non-communicable wisdom, invention or empathy, non-transferable personal trust and leadership.

Industrial design (ID) is the process of identifying problems and creating products, systems, and experiences that make everyday activities more efficient or meaningful. It is the creative act of determining and defining a product's form and features, which takes place in advance of the manufacture or production of the product. Industrial manufacture consists of predetermined, standardiz