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The Sharpe ratio

The Sharpe ratio was developed by William F. Sharpe and is also known as the Sharpe Index, the Sharpe Measure and the Reward-To-Variability ratio. The Sharpe ratio measures how well an investor is compensated for the risk taken. Calculated by subtracting the risk-free rate (like a 10 yr U.S. Treasury bond) from the rate of return for a portfolio, and More...

by Marcus Holland | Published 9 years ago
By Marcus Holland On Monday, April 8th, 2013
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Scalping

Scalping is a name given to a investment system to buy and sell quickly, typically at only a few cents higher than the original price paid. This is a trading strategy that seeks to accumulate multiple profits on More...

By Marcus Holland On Monday, April 8th, 2013
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Reserve portfolio

A reserve portfolio is essentially the savings account fund of a central bank. Monetary policy directs the central bank to set aside funds for the required reserve amount.  The central bank must show and provide More...

By Marcus Holland On Monday, April 8th, 2013
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Open market operations

Also known as OMO, this relates to the federal government’s method of buying and selling of government securities in the open market to directly increase or decrease the amount of money in the banking system. Regulating More...

By Marcus Holland On Monday, April 8th, 2013
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Money center

A money center is global bank that deals exclusively with national governments, large corporations and other banks. A money center does not borrow from or lend to individuals or consumers.  Leading money centers More...

By Marcus Holland On Monday, April 8th, 2013
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Market risk appetite

A measure of how much risk an investor is willing to take on a given trade, stock, option or security. A willingness to take on high risk may indicate an over-valuation in a particular stock or asset that may or More...

By Marcus Holland On Monday, April 8th, 2013
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Macro Fund

A hedge fund that prefers to profit from expected macroeconomics, such as changes in national unemployment, national income, GDP, inflation/stagnation or price levels. By including a vast array of financial instruments More...

By Marcus Holland On Monday, April 8th, 2013
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Liquidity

Liquidity refers to what degree an asset or security can be sold or purchased in the open market without reducing the asset’s price. The higher the demand for the asset, the easier the asset is to liquefy, thus More...

By Marcus Holland On Monday, April 8th, 2013
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Correction

A change, usually negative, of at least 10% in the markets. Stocks, bonds, commodities and indexes can all be affected by a reverse movement to adjust for an overvaluation.  While usually temporary in nature, corrections More...

By Marcus Holland On Monday, April 8th, 2013
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Central banking stance

An opinion or point of view, in this case, referring to a central bank’s opinion of the national economic status.  A central banks’ stance is indicative of the direction of the nation’s economic performance.  More...