What Are the Industries Most Likely to See Mergers and Acquisitions (M&As)? Mergers and acquisitions (M&As) are most common in the healthcare, technology, financial services, and retail sectors. In health care and technology, many small and medium-sized companies find it challenging to compete in the marketplace with the handful of behemoths that usually control the…
What Is an Open Position? An open position in investing is any established or entered trade that has yet to close with an opposing trade. An open position can exist following a buy, a long positiona sell, or a short position. In any case, the position remains open until an opposing trade takes place. Key Takeaways An open position…
Companies issue bonds to finance their operations. Most companies could borrow the money from a bank, but they view this as a more restrictive and expensive alternative than selling the debt on the open market through a bond issue. Key Takeaways Banks tend to place restrictions on borrowers that limit their business activities. For the…
What Is Backward Induction? Backward induction in game theory is an iterative process of reasoning backward in time, from the end of a problem or situation, to solve finite extensive form and sequential games, and infer a sequence of optimal actions. Backward Induction Explained Backward induction has been used to solve games since John von…
Exchange-traded funds (ETFs) have a number of features that can make these investment vehicles ideal for young investors with small amounts of capital to invest. For one, exchange-traded funds make it possible to build a diversified portfolio with relatively low investment amounts. In addition, ETFs trade throughout the day, providing ample liquidityand many have relatively…
All investors must re-evaluate and refine their investing styles and strategies from time to time. As we gain investing experience and knowledge, our view of the market is likely to change and may broaden how we envision our financial goals. Those who want to try to outperform the market—that is, realize returns greater than the market…
Market Capitalization vs. Market Value: An Overview In many areas of the financial sector, including economics, accounting, and investing, accurately assessing the value of a company can be of utmost importance. However, numerous ways exist to measure company size and value, and there is often confusion concerning similar-sounding terms. Two such misleading terms are market…
Every time gas prices take a jump, we hear many people around us railing at the big oil companies. Rapacious monsters that they are, they’re surely responsible for the high price of gasoline and are raping consumers to reap unfair and excessive profits. Below you’ll see a recent chain email that blames big oil for high…
What Is an Up-and-In Option? Up-and-in options are a type of exotic option that is often made available through specialized brokers to high-end clients in the over-the-counter (OTC) markets. The option features both a strike price and a barrier level. As the name suggests, the buyer of the option will benefit once the price of…