Category: Investments glossary

Yield-based option is a type of option that derives its value from the difference between the exercise price (expressed as a percentage) and the yield of the underlying debt instrument. Yield-based options are settled in cash.

The one-third rule estimates change in labor productivity based on changes in capital devoted to labor. The rule is used to determine the impact that changes in technology or capital have on production.

Venture capital funds are investment funds that manage the money of investors who seek private equity stakes in startup and small- to medium-sized enterprises with strong growth potential. These investments are generally characterized as high-risk/high-return opportunities.

The one-third rule estimates change in labor productivity based on changes in capital devoted to labor. The rule is used to determine the impact that changes in technology or capital have on production.

Wage expense is the cost incurred by companies to pay hourly employees. This line item may also include payroll taxes and benefits paid to employees. Wage expense may be recorded as a line item in the expense portion of the income statement. This is a type of variable cost.

The OPEC basket is a weighted average of oil prices from the different OPEC members around the world. Members of the Organization of the Petroleum Exporting Countries (OPEC) contribute data which forms the basis of the basket. The basket is a benchmark, or reference point, for those monitoring the price of oil and the stability of the global oil market.

The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100. The indicator was originally developed by J. Welles Wilder Jr. and introduced in his seminal 1978 book, New Concepts in Technical Trading Systems.

A public good is a product that an individual can consume without reducing its availability to others and of which no one is deprived. Examples of public goods include law enforcement, national defense, sewer systems, public parks, and the air we breathe. As those examples reveal, public goods are almost always publicly financed.

A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits.

A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits.