What is the role of agency theory in corporate governance?

July 9, 2024 No Comments

A: Agency theory is used to understand the relationships between agents and principals. The agent represents the principal in a particular business transaction and is expected to represent the best interests of the principal without regard for self-interest. The different interests of principals and agents

What is the variance/covariance matrix or parametric method in Value at Risk (VaR)?

July 9, 2024 No Comments

A: The parametric method, also known as the variance-covariance method, is a risk management technique for calculating the value at risk of a portfolio of assets. The value at risk is a statistical risk management technique measuring the maximum loss that an investment portfolio is

What is the weighted average of outstanding shares? How is it calculated?

July 9, 2024 No Comments

A: The amount of shares outstanding in a company will often change due to a company issuing new shares, repurchasing and retiring existing shares, and other financial instruments such as employee options being converted into shares. The weighted average of outstanding shares is a calculation

What is the Zig Zag Indicator formula and how is it calculated?

July 9, 2024 No Comments

A: The zig zag indicator is a basic tool that analysts use to find out when a security’s trend is reversing. By determining the support and resistance areas, it helps to identify significant changes in price while filtering out short-term fluctuations, thus eliminating the noise

What items on the balance sheet are most important in fundamental analysis?

July 9, 2024 No Comments

A: Fundamental analysts normally start by examining the balance sheet. This is because the balance sheet is a snapshot of the company’s assets and liabilities at a single point in time, not spread over the course of a year such as with the income statement.

What kinds of topics does microeconomics cover?

July 9, 2024 No Comments

A: Microeconomics is the study of human action and interaction. The most common uses of microeconomics deal with individuals and firms that trade with one another, but its methods and insights can be applied to nearly every aspect of purposeful activity. Ultimately, microeconomics is about

What lessons did the tech bubble crash give to investors in the Internet sector?

July 9, 2024 No Comments

A: The tech bubble crash taught investors that despite their efforts to provide an influx of cash into a rapidly growing market, there are no guarantees. While this seems like an obvious lesson for any investor, in the early days of the Internet it seemed

What math skills do I need to study microeconomics?

July 9, 2024 No Comments

A: Microeconomics can be, but is not necessarily, math-intensive. Fundamental microeconomic assumptions about scarcity, human choice, rationality, ordinal preferences or exchange do not require any advanced mathematical skills. On the other hand, many academic courses in microeconomics use mathematics to inform about social behavior in

What metrics are commonly used to evaluate companies in the food and beverage sector?

July 9, 2024 No Comments

A: Some of the key metrics most commonly used to evaluate companies in the food and beverage sector are profitability measures, such as operating margin and net profit margin, and debt measures such as the current ratio. The food and beverage sector includes food processing

What metrics can be used to evaluate companies in the wholesale sector?

July 9, 2024 No Comments

A: The largest wholesale distribution industries include motor parts, commercial equipment, electronics, petroleum products, groceries and pharmaceuticals. Some notable electronics distributors are Sonepar SA, WESCO, Rexel and Graybar. McLane, Core-Mark, H.T Hackney Company and Eby Brown are prominent wholesalers serving grocery stores. AmerisourceBergen, Cardinal Health

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