Blog Category: Financial Terms
Get definitions and guidance on all the terms you need to know within accountancy and finance.
Risk Mapping
Risk mapping visualise specific risks a company faces. It assists companies in identifying and prioritising their bus...
Understanding the Total Sum of Squares in Finance
The coefficient of determination measures how well a regression line explains the relationship between a dependent va...
Delving into the Capital Market Line in Finance
Capital Market Line was developed in the 1960s. It is a graphical representation of all portfolios that combine risk ...
What is Normal Distribution in Financial Markets
The normal distribution is a continuous probability distribution that is symmetrical around its mean. In risk managem...
What is Correlation?
Correlation measures the strength of the linear relationship between two variables and is always between -1 & 1
What does Volatility Mean?
Volatility is a statistical measure of a security's or market index's return dispersion. The more the volatility, the...
Treynor Ratio
The Treynor Ratio is a performance indicator that shows how much excess return a portfolio created for each unit of r...
Mortgage Backed Securities & its Importance
Mortgage-backed securities, called MBS, are bonds secured by home and other real estate loans. MBS is a product of As...
Counterparty Risk
Counterpart risk is defined as the risk that a counterparty is unable or unwilling to live up to its contractual obli...
Foreign Currency and Local Currency Defaults
Foreign currency defaults occur when countries fail to repay debt, while local currency defaults often result from in...
Futures Contract
Futures Contract - Financial institutions use Hedging to increase financial stability and reduce the risk of financia...
LOGIT models
LOGIT model is rom the Generalized Linear Model (GLM) family. It is primarily widely used as a statistical tool to pr...