Stock Trading News

There’s a lot of confusion regarding quantitative easing, also known as QE, and the impact on bond yields (longer-term interest rates). Quantitative easing is the secondary form of monetary policy after interest rate-driven policy. Once interest rate policy has been exhausted – when short-term interest rates are at about zero – then the focus shifts […]

This article was published on March 18, 2022 Certain individuals holding certain types of assets in certain currencies face the biggest risk of wealth destruction today. Markets provide the biggest opportunities – and the biggest risks – when there are unsustainable flows in liquidity in places where the prices discount earnings or economic scenarios that […]

Monte Carlo simulation is common when doing financial forecasts in order to determine how profitable the return on a certain asset of a given period of time might be. Monte Carlo simulation also allows us to take the sample size that was generated and calculate a couple of useful things. For one, we can ascertain […]

Even some of the most basic questions about the markets are important as it pertains to understanding them, to get to kinow the mechanics involved in buying and selling stocks. When you fund a brokerage account and execute a trade, you tie up a certain amount of your money as collateral. As such, where does […]

The dividend discount model (DDM) is a method of valuing a company’s stock based on discounting the sum of all future dividends in terms of present value. In this case, we will be using a two-stage dividend discount model. Two-stage models tend to be the most common when evaluating firms. They entail valuing the amount […]

As an academic exercise, estimating or predicting the value of something or determining relationships between two or more variables is commonly done through linear regression methods. It is one of the most common statistical methods that individuals use to analyze data on a vast assortment of data. Can this be accurately be done with respect […]

An accretion/dilution analysis helps to determine the cost-effectiveness of a potential merger and acquisition (often termed M&A) deal. Mergers and acquisitions are made with the intention of improving the financial performance of each firm relative to what they could accomplish independently. This can be achieved by firms’ ability to reduce costs, combine talent and/or technology, […]

Using the Black-Scholes options pricing model, we can determine: the level of equity in a firm its value of outstanding debt the appropriate interest rate on the debt it has, and its risk neutral probability of default (i.e., bankruptcy) This model would be most applicable to distressed, highly leveraged firms. A distressed firm is one […]

Most traders and investors, especially those in developed markets, have grown accustomed to the fact that markets are liquid and they reliably open and close at predefined hours during certain days of the week. However, capital markets can also dry up or even disappear altogether. We also tend to be used to the idea that […]

Those in accounting, business, and finance will become familiar with the three types of financial accounting statements: income statement balance sheet, and cash flow statement All three serve as financial analysis reports to shed insight into how efficiently and effectively a business is operating. Let’s take a look at the nuts and bolts of all […]