Academy

Dual Class Stock

A dual class stock is when a company issues two share classes. A dual class stock structure can consist of Class A and Class B shares, for example. These shares can differ in terms of voting rights and dividend payments.When multiple share classes of stock are issued, typically one class is offered to the general public, while the other is offered to company founders, executives, and family. The class offered to the general public often has limited or no voting rights, while the class available to founders and executives has more voting power and often provides for majority control of the company.

Duopoly

A duopoly is a situation where two companies together own all, or nearly all, of the market for a given product or service. A duopoly is the most basic form of oligopoly, a market dominated by a small number of companies. A duopoly can have the same impact on the market as a monopoly if the two players collude on prices or output.

Data Smoothing

Data smoothing is done by using an algorithm to remove noise from a data set. This allows important patterns to more clearly stand out.Data smoothing can be used to help predict trends, such as those found in securities prices, as well as in economic analysis. Data smoothing is intended to ignore one-time outliers and take into account the effects of seasonality.

Backtesting

Backtesting is the general method for seeing how well a strategy or model would have done ex-post. Backtesting assesses the viability of a trading strategy by discovering how it would play out using historical data. If backtesting works, traders and analysts may have the confidence to employ it going forward.

Data Warehousing

A data warehouse is the secure electronic storage of information by a business or other organization. The goal of a data warehouse is to create a trove of historical data that can be retrieved and analyzed to provide useful insight into the organization's operations.A data warehouse is a vital component of business intelligence. That wider term encompasses the information infrastructure that modern businesses use to track their past successes and failures and inform their decisions for the future.

Lifetime Cost

Lifetime cost is an estimate of how much an item, such as a car, a home, or a piece of industrial machinery, will cost to own over the expected useful life of that item. It also includes cost of purchasing the item in the first place.

Stare Decisis

Stare decisis is a legal doctrine that obligates courts to follow historical cases when making a ruling on a similar case. Stare decisis ensures that cases with similar scenarios and facts are approached in the same way. Simply put, it binds courts to follow legal precedents set by previous decisions.Stare decisis is a Latin term meaning "to stand by that which is decided."

Income Annuity

An income annuity is an annuity contract that is designed to start paying income as soon as the policy is initiated. Once funded, an income annuity is annuitized immediately, although the underlying income units may be in either fixed or variable investments. As such, income payments may fluctuate over time.An income annuity, also known as an immediate annuity, a single-premium immediate annuity (SPIA), or an immediate payment annuity, is typically purchased with a lump sum payment (premium), often by individuals who are retired or are close to retirement. These annuities may be contrasted with deferred annuities that begin paying out years later.

Yield Equivalence

Yield equivalence is the interest rate on a taxable security that would generate a return equivalent to the return of a tax-exempt security, and vice versa.

Yield Pickup

Yield pickup refers to the additional interest rate an investor receives by selling a lower-yielding bond and buying a higher-yielding bond. The yield pickup is done to improve the risk-adjusted performance of a portfolio.

Revenue Bond

A revenue bond is a category of municipal bond supported by the revenue from a specific project, such as a toll bridge, highway, or local stadium. Revenue bonds that finance income-producing projects are thus secured by a specified revenue source. Typically, revenue bonds can be issued by any government agency or fund that is managed in the manner of a business, such as entities having both operating revenues and expenses.Revenue bonds, which are also called municipal revenue bonds, differ from general obligation bonds (GO bonds) that can be repaid through a variety of tax sources.

Income Smoothing

Income smoothing uses accounting techniques to level out fluctuations in net income from one period to the next. Companies indulge in this practice because investors are generally willing to pay a premium for stocks with steady and predictable earnings streams as opposed to stocks whose earnings are subject to more volatile patterns, which can be regarded as riskier.Income smoothing is not illegal if the process follows generally accepted accounting principles (GAAP). Talented accountants are able to adjust financial books in an above-board way to ensure the legality of income smoothing. However, many times income smoothing is done under fraudulent methods.