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Investments glossary

Forecasting

Forecasting is a technique that uses historical data as inputs to make informed estimates that are predictive in determining the direction of future trends. Businesses utilize forecasting to determine how to allocate their budgets or plan for anticipated read more

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Investments glossary

Inflationary Gap Definition

An inflationary gap is a macroeconomic concept that describes the difference between the current level of real gross domestic product (GDP) and the anticipated GDP that would be experienced if an economy is at full employment. This is also referred read more

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Investments glossary

Price-To-Book (P/B Ratio)

Companies use the price-to-book ratio (P/B ratio) to compare a firm’s market capitalization to its book value. It’s calculated by dividing the company’s stock price per share by its book value per share (BVPS). An asset’s book read more

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Investments glossary

Return on Average Capital Employed – ROACE Definition

The return on average capital employed (ROACE) is a financial ratio that shows profitability versus the investments a company has made in itself. This metric differs from the related return on capital employed (ROCE) calculation, in that it takes the read more

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Investments glossary

Expected Utility

Expected utility is an economic term summarizing the utility that an entity or aggregate economy is expected to reach under any number of circumstances. The expected utility is calculated by taking the weighted average of all possible outcomes under read more

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Investments glossary

Times Interest Earned (TIE) Ratio

The times interest earned (TIE) ratio is a measure of a company’s ability to meet its debt obligations based on its current income. The formula for a company’s TIE number is earnings before interest and taxes (EBIT) divided by the total read more

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Investments glossary

Open Mouth Operations

Open mouth operations are speculative statements made by the Federal Reserve System (FRS) to influence interest rates and inflation. Open mouth operations are the announcements by the Fed, also known as the central bank when it informs exchanges read more

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Investments glossary

Word-of-Mouth Marketing (WOM Marketing)

Word-of-mouth marketing (WOM marketing) is when a consumer’s interest in a company’s product or service is reflected in their daily dialogues. Essentially, is it is free advertising triggered by customer experiences—and usually, something read more

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Investments glossary

Standard of Living

A standard of living is the level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or a certain geographic area. The standard of living includes basic material factors such as income, gross domestic product read more

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Investments glossary

ZZZZ Best

ZZZZ Best, founded by Barry Minkow, was a carpet-cleaning and restoration company that served as a front for a Ponzi scheme. The company went public in December 1986 and was quickly valued at over $300 million. Within seven months of the IPO, ZZZZ read more