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Finance GlossaryYield Curve
Yield Curve
Definition of Yield Curve
The yield curve is a graphical representation showing yields of bonds with different maturities. A normal upward-sloping yield curve indicates higher returns for long-term bonds, while an inverted yield curve, where short-term yields exceed long-term yields, often signals expectations of economic slowdown or recession.
Related Terms
Strike Price
The strike price refers to the fixed price at which a trader can buy (call) or sell (put) the underlying asset. The strike price is a key component in options trading. It helps traders determine whether or not the option would be profitable when it expires. The intrinsic value of an option is influenced by the difference between the market price and strike price.
Convertible Arbitrage
A convertible arbitrage is a trading strategy that involves buying convertible securities - most commonly bonds and preferred stock - and a short option on the common stock of the same company.
Because of this combination of purchases, a convertible arbitrage strategy is known as a neutral strategy designed to profit from the supposed inefficiencies that lie in the pricing of convertible securities.
Because of this combination of purchases, a convertible arbitrage strategy is known as a neutral strategy designed to profit from the supposed inefficiencies that lie in the pricing of convertible securities.
Identifiable Asset
An identifiable asset is a tangible or intangible asset that be assigned a fair value at any point in time. This concept is important during acquisitions and mergers as not all assets on a company’s balance sheet can easily be valued.
Simple examlpeps of identifiable assets include machinery. You can easily identify machinery as a separate entity and assign it a value based on various factors.
Simple examlpeps of identifiable assets include machinery. You can easily identify machinery as a separate entity and assign it a value based on various factors.
Window Dressing
Window dressing is a strategy used by fund managers near reporting periods to improve the appearance of portfolio performance. This may involve selling underperforming stocks and buying well-known or strong-performing ones before disclosures, making the portfolio look more attractive to investors without changing long-term strategy.
Direct Public Offerings
A Direct Public Offering or DPO allows a company to issue shares directly to the public without an intermediary like investment banks. In the process, the company becomes publicly traded.
The cost of a DPO is known to be relatively low compared to an IPO.
Furthermore, the issuer of the DPO has control over the issue price while the paperwork and effort involved is also comparatively low. That said, the company must go through proper regulatory procedures during the process.
The cost of a DPO is known to be relatively low compared to an IPO.
Furthermore, the issuer of the DPO has control over the issue price while the paperwork and effort involved is also comparatively low. That said, the company must go through proper regulatory procedures during the process.
Bombay Stock Exchange
Established in 1875, Bombay Stock Exchange or simply BSE is a place where stockbrokers and traders can buy and sell securities like stocks, bonds, ETFs, and more. 5000+ securities are listed on BSE, which is the oldest stock exchange in India and Asia.
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