What Is a Tuck-In Acquisition?

July 8, 2024 No Comments

A: A tuck-in acquisition, often referred to as a “bolt-on acquisition,” is a type of acquisition in which the acquiring company merges the acquired company into a division of the acquiring entity. Often, this technique is used when the acquiring company wishes to obtain a significant

What is dead money?

July 8, 2024 No Comments

A: Dead money is a common term used on Wall Street to describe money that does not earn a return for an investor. It could be money stashed in a mattress, non-interest yielding checking account or a security that does not yield returns. Any money

What is demand-side economics?

July 8, 2024 No Comments

A: Because Keynesian economists believe the primary factor driving economic activity and short-term fluctuations is the demand for goods and services, the theory is sometimes called demand-side economics. This perspective is at odds with classical economic theory, or supply-side economics, which states the production of goods or services,

What is GDP and why is it so important to economists and investors?

July 8, 2024 No Comments

A: The gross domestic product (GDP) is one of the primary indicators used to gauge the health of a country’s economy. It represents the total dollar value of all goods and services produced over a specific time period, often referred to as the size of

What is general equilibrium theory in macroeconomics?

July 8, 2024 No Comments

A: General equilibrium theory is a macroeconomic theory that explains how supply and demand in an economy with many markets interact dynamically and eventually culminate in an equilibrium of prices. The theory assumes that there is a gap between actual prices and equilibrium prices. The

What is human capital and how is it used?

July 8, 2024 No Comments

A: Human capital is a loose term that refers to knowledge, experience and skills of an employee. The theory of human capital is relatively new in finance and economics. It states that companies have an incentive to seek productive human capital and to add to

What is market capitulation?

July 8, 2024 No Comments

A: By definition, capitulation means to surrender or give up. In financial circles, this term is used to indicate the point in time when investors have decided to give up on trying to recapture lost gains as a result of falling stock prices. Suppose a

What is QE3 (quantitative easing)?

July 8, 2024 No Comments

A: “Quantitative easing” refers to steps that the U.S. Federal Reserve takes in attempting to boost the country’s lagging economy. Historically, the Fed’s main tool for spurring growth has been lowering short-term rates. However, QE employs expansionary monetary policy, which involves the purchasing of bonds

What is the “percentage off the 52-week high or low”? How is this calculated?

July 8, 2024 No Comments

A: The “percentage off the 52-week high or low” refers to when a security’s current price is relative to where it has traded over the last 52 weeks. This gives investors an idea of how much the security has moved in the last year and

What is the correlation between money supply and GDP?

July 8, 2024 No Comments

A: It is difficult to measure the money supply, but most economists use the Federal Reserve’s aggregates known as M1 and M2. Gross domestic product, or GDP, is another government statistic that is tricky to measure perfectly, but nominal GDP tends to rise with the

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