When selecting the appropriate fund, investors often overlook the information contained and insights that can be gleaned from the fund's benchmark. The benchmark is not only a standard by which to evaluate a fund, it also helps in gauging the expected returns of a fund, the composition of ...
What is the term used to describe a market in which there are neither external benefits nor external costs? What is the term for the production of goods with the lowest opportunity cost? What does internalizing an externality mean? What is a "crude oil benchmark" as it relates to busin...
What is the CPI? What you should know Why does it matter? How the CPI can move markets You've probably heard of the Consumer Price Index (CPI), even if you don't know exactly what it means. Especially in inflationary times, the Consumer Price Index is a popular talking point in...
What does the rate decision mean for your money? Expect to continue to pay high rates to borrow money, noted Jacob Channel, senior economist at LendingTree. Mortgage rates are likely to remain above 7%, at least in the near term, he added. Credit card rates, which are at recordhighs, ...
What does beta mean in finance? Beta represents the volatility of an asset relative to the market as a whole. Low-beta assets are relatively less risky, since their prices are expected to move by smaller amounts. High-beta assets are relatively more risky. ...
Another factor within this equation involves how organizations are being perceived by investors as well as the general public. Individuals have become exceedingly interested in the role of sustainability, long-term environmental impacts and even how a firm is perceived by its employees. While some ...
The adage that goes “do not put all your eggs in one basket” never gets old, and even in finance, it really makes sense. Diversification is when an investor invests his assets in investments that are not going in a uniform direction. Simply put, it invests in several assets that are...
What do economists mean when they talk about “capital accumulation”? Surprisingly, the answer to this question is anything but clear, and it seems the most unclear in times of turmoil. Consider the “financial crisis” of the late 2000s. The very term already attests to the presumed nature...
Investment risk is measured by its deviation from an expected outcome. A result may differ from the expected outcome, for better or worse. This deviation is expressed in absolute terms or relative to something like a marketbenchmark. To achieve higher returns, one expects to accept greater risk...
What Does Alpha Mean in Finance? The term alpha is a measure of performance. It is used to describe a financial security's ability to outperform or beat the market. Investment returns are commonly compared to a benchmark or market index. As such, an investment's alpha refers to the excess...