The S&P 500 Index is a diverse index that includes 500 American companies that represent over 70% of the total market capitalization of the U.S. stock market.  First developed in 1923, the i...

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The S&P Small- Cap 600 Index consists of 600 small-cap stocks.  A small-cap company is generally defined as a stock with a market capitalization between $300 million and $2 billion. The S&...

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The S&P Europe 350 index is made up of 350 individual European company stocks drawn from 17 major European markets and represents approximately 70% of the region's market capitalization.The S&...

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The S&P Frontier Broad Market Index (also known as the S&P Frontier BMI) measures the performance of markets in 34 small countries. The individual country indices that make up the S&P Fron...

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The S&P Global 1200 index is comprised of seven indices with stocks from 29 representative countries. The index is used as a benchmark for global equity markets.The seven indices that make up the ...

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The S&P Global Broad Market Index (also known as the S&P Global BMI) is a widely encompassing, rules-based index that measures global stock market performance.The S&P Global BMI covers app...

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The S&P Global Equity Index series is comprised of three indices: The S&P Frontier Broad Market Index, The S&P Global Broad Market Index and the S&P/IFCI.The S&P Global Equity Inde...

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The S&P Mid-Cap 400 Index tracks a diverse basket of medium-sized U.S. firms. A mid-cap stock is broadly defined as a company with a market capitalization ranging from about $2 billion to $10 bill...

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The S&P/IFCI Composite is a liquid and investable leading emerging market index. It is a subset of the S&P Emerging Plus Broad Market Index, with the addition of South Korea.The S&P/IFCI c...

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A sacrifice ratio measures the costs of lower economic production as a percentage of the change in inflation. The formula for the sacrifice ratio is: Sacrifice Ratio = Dollar Cost of Product...

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A safe asset (usually a physical asset rather than a security) carries a low degree of liability for its owner. In more technical financial terms, safe assets are similar to cash -- they carry little ...

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A safe deposit box is a metal box, usually housed in a bank vault, that customers can rent in order to keep valuables, legal documents and other prized possessions in a secure location.   Obta...

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Safekeeping is a term describing a financial institution's responsibility to keep clients' assets in a safe area. Let's say John Doe deposits $4,000 into his savings account at Bank XYZ. ...

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A safekeeping certificate is a document that proves that a person owns a security or a certificate of deposit (CD). An American Depository Receipt (ADR) is one of the most common forms of safekeeping...

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The safety-first rule, also called Roy's safety-first rule, is a measure of the minimum returns an investor requires from a portfolio. The formula for the safety-first rule is: Safety-First R...

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A saitori is a member of the Tokyo Stock Exchange who matches buy and sell orders. Saitori are similar to specialists in the New York Stock Exchange. They match up brokers' buy and sell orders, a...

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The Salad Oil Scandal of 1963 was a case of corporate fraud perpetrated by the Allied Crude Vegetable Oil Company, which resulted in serious losses for major banks acting as its creditors.Banks for th...

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A salary freeze is a temporary cessation of pay raises. For example, Company XYZ makes widgets. Company ABC recently launched the new iWidget, which is taking away a significant amount of market shar...

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A sale is the transfer of title to a piece of property or performance of a service in return for compensation. In the retail world, a sale means a temporary price discount on certain items.   ...

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In the business world, a sale of crown jewels occurs when a company is frantically attempting to fend off a takeover. For example, Company ABC makes a bid to buy Company XYZ. Company XYZ's founde...

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Also called commission or a load, a sales charge is a fee paid to purchase or sell a specific investment. It is expressed as a percentage of the amount invested. The term is most often used when ...

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A sales lead is a prospective customer or information about a prospective customer. For example, Company XYZ sells widgets. Its salespeople want to sell more widgets to earn more commissions, and so ...

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The term sales per share represents the portion of a company's revenue that is allocated to each share of common stock. The figure can be calculated simply by dividing sales earned in a given repo...

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Sales per square foot is an indicator of sales efficiency. The formula for it is: Sales Per Square Foot = Sales / Square Feet of Selling Space For example, let's say Company XYZ sold $15 million...

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Sales tax is a consumption tax levied on goods and services purchased at the retail level, paid by the consumer and submitted by the retailer to the governing tax authority.In the United States, the s...

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The sales to cash flow ratio measures the level of a company's sales against its total cash flow.Expressed on a per-share basis, the sales to cash flow ratio is calculated by dividing a company...

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Sallie Mae, also known as The Student Loan Marketing Association (SLM), is the largest originator, funder and servicer of student loans in the United States. It also provides counseling about stu...

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Salvage value, also called scrap value, is the value of an asset after it has come to the end of its useful life.For example, let's assume you buy a car for $20,000. You believe that the car could las...

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The same property rule is an IRS rule stating that money taken from an Individual Retirement Account must be placed into a similar type of account if the account holder is less than 59.5 years old. L...

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Same-day substitution is the act of withdrawing money from and adding money to a margin account on the same day.   Let's assume you want to buy 500 shares of Company XYZ for $5 per share a...

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Same-store sales measures the increase in revenue over a particular period for the same set of stores in each period. For example, let's assume that Company XYZ is a restaurant company that has 4...

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Samurai bonds are corporate bonds issued in Japan by a non-Japanese company. Samurai bonds are yen-denominated bonds issue in Japan by a foreign company. The bonds are subject to Japanese bond re...

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Samurai Market is slang that refers to the Japanese stock market. People in the United States are the most common users of this term. Samurai market is often used in conjunction with “Yankee Ma...

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Sandbag is slang for lowering expectations. Let's say John Doe is a new employee at Company XYZ. He gets invited to the annual company golf outing. The other employees ask him how his game is. Jo...

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A Santa Claus rally is a surge in the stock market that occurs between Christmas and New year's Day. Over time, the stock markets have rallied between December 25th and January 1st more often...

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The Sarbanes-Oxley Act, officially named the Public Company Accounting Reform and Investor Protection Act of 2002, became law on July 30, 2002. The law was informally named after its sponsors, Senator...

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Saturday night specials are illegal rules that give preferential treatment to some shareholders and pressure others during tender offers. Let's assume Company XYZ wants to purchase the common shar...

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The saver's tax credit, also called the savers credit, is a tax credit for making contributions to certain retirement accounts.   The savers credit gives taxpayers a tax credit of up to $1...

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In economics, savings is the amount that is left after spending. In banking, savings refers to savings accounts, which are short-term, interest-bearing deposits with a bank or other financial institut...

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A savings account is a low-risk, interest-bearing deposit with a bank or other financial institution. Technically, savings accounts are time deposits, meaning that a bank can require the account hold...

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Savings bonds are bonds sold by the U.S. Treasury. They are used to raise money from the public to fund its operations and administer the economy. When the government sells bonds, it is essentially ta...

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Savings clubs most commonly refer to a special type of account that provides a way to regularly save for a specific goal or event. These accounts historically came with a savings passbook with coupons...

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The Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) is a salary savings plan that small companies can offer their employees. The plan allows employers to match their employees' ...

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Scalability refers to a company's ability to increase its production profitably. Let's assume it costs Company XYZ $1 million to produce 1 million widgets per year ($1 per widget). This $1 mi...

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The term scalpers refers to securities traders who manipulate the market.  Scalpers may also refer to traders who earn relatively small amounts of money from the arbitrage between bid prices and ...

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Scalping is a form of day trading that involves earning small profits on large volumes of securities. A day trader is a very active securities trader who holds securities for a very short time (genera...

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An Internal Revenue Service (IRS) Schedule K-1 is used to report a beneficiary's share of income, deductions, credits, and other items from pass-through entities. These generally include lim...

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Scrap value, also called salvage value, is the value of an asset after it has come to the end of its useful life. Let's assume you buy a car for $20,000. You believe the car could last for 15 yea...

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A seasonal industry is an industry whose sales or profits fluctuate in repeatable patterns during the course of the year. For example, the restaurant industry is a seasonal industry. Sales for many c...

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Seasonality is a fluctuation in sales or profits during the course of a fiscal year. For example, the restaurant industry is somewhat seasonal. Sales for many companies are stronger in summer and fal...

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A seasoned issue, also called follow-on offering or secondary offering, is a sale of stock by a company or by an existing shareholder of a company that is already publicly held. Let's say Company...

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A seat is a license to trade on the floor of the New York Stock Exchange, either as an agent for someone else or for his or her own personal accounts (in which case, the person is called a floor trade...

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SEC Form 10-Q is a quarterly performance report that public companies must submit to the SEC. The 10-Q is just one of many forms a company that is publicly traded in the U.S. must file with the SEC. ...

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An SEC Form 11-K is an annual report that is filed with the Securities and Exchange Commission (SEC) for employee stock purchase plans and similar savings plans that constitute securities registered u...

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SEC Form BD is an application with the Securities and Exchange Commission (SEC) to register as a broker-dealer. A Form BD makes public the information about any broker-dealer that wishes to trad...

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Also called a home equity loan, a second mortgage is secured by the equity in a house. Equity equals the value of the house less the balance owed on the homeowner's mortgage. Second mortgages are n...

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Second-to-die insurance is a type of life insurance which grants a death benefit only once the second insured party has died. Also called survivorship insurance, second-to-die insurance is a life ins...

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A secondary offering refers to a large-scale market sale of a company's shares by a major shareholder.Also called a secondary distribution, a secondary offering is distinguished from an initial pu...

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Sector rotation is a strategy based on moving investments across business sectors to take advantage of cyclical trends in the overall economy.The basic idea behind sector rotation is that the economy ...

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A secular market is a market that is for all intents and purposes captive to broader economic forces or traumas.   Let's say the United States experiences a massive terror attack on its ow...

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Secured creditor is a lender that provides collateralized debt. Mortgage lenders are the most common example of secured creditors: They lend you money and keep the house as collateral. Here'...

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Secured debt is debt that is collateralized. Mortgages are the most common example of secured debt: the bank lends you the money and the bank has the house as collateral. Here's another example:...

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The Securities Act of 1933 was the first law passed that imposed regulations on the securities industry following the stock market crash of 1929. The stock market crash of 1929 resulted from more tha...

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A securities analyst gathers and interprets data about securities, companies, corporate strategies, economies or financial markets. Securities analysts are sometimes called financial analysts, equity ...

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The Securities and Exchange Commission, also known as the SEC, is a regulatory body that was established as a result of the Securities Act of 1934. Founded after the stock market crash of 1929, th...

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The Securities Investor Protection Corporation (SIPC) is a nonprofit corporation created to insure the assets investors have deposited in brokerage firms. All registered brokers, dealers, member...

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Seed capital is the earliest stage of capital investment for a start-up venture.Startup financing involves several stages of capital formation:  seed capital, venture capital, mezzanine or bridge...

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Self-dealing is an illegal activity that occurs when a person or entity with fiduciary duty puts his or her own  interests ahead of a client's interests in a transaction. Let's say John ...

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The self-employment tax refers to the Social Security and Medicare taxes paid on income earned by people who work for themselves.People who are self-employed must pay both the employee and employer po...

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To self-insure means to use one's own money to pay for unexpected losses (rather than insurance). Let's say John Doe owns a restaurant. He buys property and casualty insurance that only cover...

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Sell side, sometimes called prime brokers, refers to investment firms which sell securities and assets to money management firms and corporate entities. They may be considered intermediaries which bot...

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A sell-off is the rapid selling of a security leading to a sharp decline in its price. When a substantial number of shareholders sell a specific stock, it is called a sell-off.  Generally sp...

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A seller's market exists when there are more sellers than buyers in the market for a certain good or service. Housing is a common place to find a seller's market. Let's say that ABC Town ...

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A semi-variable cost has characteristics of both fixed costs and variable costs once a specific level of output is surpassed.Semi-variable costs remain fixed up to a particular production volume. Beyo...

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Senior debt is debt that is first to be repaid, ahead of all other lenders or creditors, in the event of a borrower’s bankruptcy. For example, if Company XYZ issues bonds, the bondholders are c...

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STRIPS stands for Separate Trading of Registered Interest and Principal of Securities. They are securities that represent the separate interest and principal components of Treasuries. The U.S. Trea...

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Serial bonds (or installment bonds) describes a bond issue that matures in portions over several different dates.  Instead of facing a large lump-sum principal re-payment at maturity, an issuer c...

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Administered by the Financial Industry Regulatory Authority (FINRA) and designed by the North American Securities Administrators Association (NASAA), the Series 65 is an exam and professional license ...

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The Series 82 is an exam for individuals who want to be licensed to do primary offerings of private placements.The Financial Industry Regulatory Authority (FINRA) administers the Series 82 exam as man...

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Settlement price refers to the market price of a derivatives contract at the close of a trading day.Also called the closing price, the settlement price is the price at which a derivatives contract set...

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Settlement risk refers to the risk or probability that one party will not uphold their contractual obligation in a transaction or deal.Settlement risk is most often associated with currency trading. H...

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Severance pay refers to a payment from a company to an employee who is being discharged. Under certain circumstances, employers compensate an employee who is being discharged with a sum of money ...

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The shadow banking system (or shadow financial system) is a network of financial institutions comprised of non-depository banks -- e.g., investment banks, structured investment vehicles (SIVs), condui...

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Shadow pricing is the practice of allotting a dollar-value to an abstract commodity for the purpose of cost-benefit analysis.Cost-benefit analysis takes into account abstract commodities (also called ...

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The Shanghai Composite Index tracks the biggest and most important public companies in China. The Shanghai Composite Index is similar to the Dow Jones Industrial Average (DJIA) in the U.S. The Shang...

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Share classes refers to the division of a company's equity into different classes, which have different rights.Companies generally set forth the distinguishing features of their share classes in t...

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A share purchase right is an instrument that entitles the holder to purchase a specified number of shares at a specified price.Offered by an issuing company, a share purchase right gives current share...

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Shareholder value added (SVA) represents a company's worth to shareholders in the absence of liabilities and capital costs.Shareholder value added (SVA) is expressed as a company's capital cos...

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Shareholders equity is a measure of how much of a company's net assets belong to the shareholders. Shareholders equity is found on the balance sheet. It has five primary components: Par Value o...

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Shares outstanding refers to all shares currently owned by stockholders, company officials, and investors in the public domain, but does not include shares repurchased by a company.Shares outstanding ...

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The Sharpe ratio is measure of risk. It is named after Stanford professor and Nobel laureate William F. Sharpe. The Sharpe ratio is a ratio of return versus risk. The formula is: (Rp-Rf)/ ?p where:...

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A shelf offering is a sale of stock by a company over time. Let's say Company XYZ is a public company and would like to sell shares in order to raise money to build a new factory. The company alr...

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A shelf registration is the filing and registration with the Securities and Exchange Commission (SEC) for a security offering that is released to the public market incrementally over a period of time ...

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The shooting star candlestick is a chart formation consisting of a candlestick with a small real body, and a large upper shadow. This pattern represents a potential reversal in an uptrend. It is also ...

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Short covering refers to the practice of purchasing securities to cover an open short position. To close out a position, a trader purchases the same number and type of shares that he sold short.Trader...

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Short interest is the number of shares or units of a security that have been sold short and not yet covered or repurchased. It is typically expressed as a percentage of the total securities outstandin...

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A short interest ratio is the number of shares or units of a security that have been sold short and not yet covered or repurchased. It is typically expressed as a percentage of the average daily tradi...

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Short interest theory suggests that a high level of short interest indicates an imminent rise in the price of a stock.Short interest theory posits that a high number of outstanding short positions on ...

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A short sale is a three-step trading strategy that seeks to capitalize on an anticipated decline in the price of a security. First, arrangements are made to borrow shares of the security, typical...

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Short selling is a trading strategy that seeks to capitalize on an anticipated decline in the price of a security. Essentially, a short seller is trying to sell high and buy low.Short selling inv...

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A short squeeze is a situation in which a stock's price increase triggers a rush of buying activity among short sellers.  Short sellers must buy stock to close out their short positions and c...

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Short-term gain usually refers to the profit on the sale of an investment that has been held less than a certain IRS-defined period of time. Let’s assume you purchase 100 shares of Company XYZ ...

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In regards to investing, “short-term” refers to an investment made that can easily be converted to cash in under five years. Usually, these investments are high-quality and very liquid assets or i...

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A signature loan is a loan offered by banks or other financial institutions that does not require collateral. Signature loans are also known as personal or unsecured loans since they are not secured b...

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A signature-debit transaction, also known as an offline transaction, is a payment method that uses a debit card to transfer funds from a checking account to a merchant across a digital credit card net...

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Silicon Valley is the area around San Jose and San Francisco, California that is home to a number of well-known internet, software, and computer companies.Named for silicon, the element from which com...

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Simple interest is a basic formula for calculating how much interest to apply to a principal balance. Simple Interest = Interest Rate x Principal BalanceFor example, let's assume that John Doe pu...

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A simplified employee pension (SEP) is a type of individual retirement account (IRA) that can be opened by an employer on behalf of an employee or by a self-employed individual. It may also be kno...

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A single-payer system is a health care system in which the government pays for all health care costs. Though there is considerable debate about how a single-payer system fundamentally works, by many ...

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A sinking fund is a part of a bond indenture or preferred stock charter that requires the issuer to regularly set money aside in a separate custodial account for the exclusive purpose of redeeming the...

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Small-cap stock refers to a company with a market capitalization (calculated by taking a firm's current share price and multiplying that figure by the total number of shares outstanding) near...

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Smartphone banking is the use of a smartphone or other cellular device to perform tasks such as monitoring account balances, transferring funds between accounts, bill payment and locating an ATM while...

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Social security is a federal program that provides income and health insurance to retired persons, the disabled, the poor, and other groups. The program started in 1935 with the signing of the Social ...

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Social Security tax is an employment tax that funds the Social Security program, a mandatory U.S. government program of retirement, disability, and life insurance. This tax pays for the benefits pr...

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Socially responsible investment (SRI) is an investment strategy that seeks both financial return and social good.Investment strategies are usually focused on returns on investment, seeking to maximize...

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A sole proprietorship is a person who owns an unincorporated business by himself or herself. In a sole proprietorship, there is no legal distinction between the owner and the business entity. ...

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Solvency is a company’s ability to pay its debts as they become due.Solvency measures a company's ability to meet its financial obligations. Short-term solvency is often measured by the cu...

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Sour crude is a type of unrefined oil that contains sulfur.  It is difficult to refine and usually fetches a lower price.Crude oil is considered sour when it has more than 0.5% sulfur. This and o...

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Sovereign debt refers to the amount of money a country owes to the holders of its government bond. In the United States, sovereign debt is issued by the Department of Treasury and the bonds are...

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Special assessment bonds (also known as special assessment obligations) are municipal bonds that are repaid with taxes assessed on the land that benefits from the improvements financed by the bonds.Fo...

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Special assessment obligations (also called special assessment bonds) are municipal bonds that are repaid with taxes assessed on the property that benefits from the improvements financed by the bonds....

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A special dividend, also known as an extra dividend, is a one-time distribution of corporate earnings to company shareholders, which usually stem from exceptional profits during a given quarter or per...

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Specific risk is a discrete risk to which only a specific asset or type of asset is exposed. It is the opposite of systematic risk.Specific risk is the risk of an event occuring that would directly or...

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Speculation is a method of short-term investing whereby traders essentially bet on the direction an asset's price will move.Technically, anyone who buys or shorts a security with the expectation o...

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The speculation index measures the volume of trades on the American Stock Exchange (AMEX) versus trade volume on the New York Stock Exchange (NYSE).The AMEX tends to list riskier stocks issued by smal...

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A speculator is a person or an entity that trades securities essentially as bets that the price will go up or down, and as such, typically has an above-average risk tolerance.Although one can argue th...

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A spider (SPDR) is an exchange-traded fund (ETF) that tracks the Standard & Poor's 500 Index. SPDR stands for S&P Depository Receipts. However, the term can also refer to any ETF that trac...

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Spinning tops have small real bodies, and they portray a stock or index plagued by uncertainty. The spinning top has small upper and lower shadows. The spinning top candle looks like this: Spi...

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Also called the cash market or the physical market, the spot market is where assets are sold for cash and delivered immediately.Spot markets differ from futures markets in that delivery takes place im...

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The spot price is the current market price at which an asset is bought or sold for immediate payment and delivery.  It is differentiated from the forward price or the futures price, which are pri...

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A spot trade is an asset or commodity transacted and delivered immediately.Also called cash trades, spot trades occur in the spot market and are characterized by the immediate or near-immediate delive...

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Spousal support is a series of payments to a separated or ex-spouse according to a divorce decree or separation agreement.Also known as "alimony," the idea behind spousal support is to provide...

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A spread trade occurs when an investor simultaneously buys and sells two related securities that are bundled as a single unit. Each of the transactions is referred to as a "leg."The purpose of...

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Springs are false breakouts that can trap the unsuspecting trader. Spring patterns quickly reverse, with the stock or index then often testing the opposite end of the trading range. A spring is a fals...

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Springs and upthrusts are false breakouts that can trap the unsuspecting trader. Both patterns quickly reverse, with the stock or index then often testing the opposite end of the trading range. A s...

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A squawk box is a speaker used at brokerage firms and investment banks to help brokers, analysts and traders communicate with each other. Squawk Box is also an early morning business program on CNBC.S...

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The SSE Composite Index tracks the largest and most important public companies in China.  The SSE Composite Index is similar to the Dow Jones Industrial Average (DJIA) in the U.S. The SSE Compo...

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Standard & Poor's (S&P) is a financial services company and a division of The McGraw-Hill Companies, Inc. S&P does business in six main areas: credit ratings, indices, equity research,...

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A standard deduction is a reduction in taxable income. Federal, state and local tax codes determine what is deductible and which taxpayers are eligible for deductions. There are two kinds of tax dedu...

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Standard deviation is a measure of how much an investment's returns can vary from its average return. It is a measure of volatility and in turn, risk. The formula for standard deviation is: Standar...

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The statement of income is one of the three primary financial statements used to assess a company’s performance and financial position at the end of an accounting period (the two others being th...

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The statement of operations is one of the three primary financial statements used to assess a company’s performance and financial position (the two others being the balance sheet and the cash fl...

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A step-up bond is a bond with a coupon that increases ("steps up"), usually at regular intervals, while the bond is outstanding. Step-up bonds are often issued by government agencies.Let's...

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A step-up in basis refers to an increase in the price at which an investment is considered to have been purchased. Let's assume that your uncle purchased 100 shares of Disney in 1970 for $1 per s...

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The stochastic oscillator is a momentum indicator that shows the location of the current closing price of a security (or index) relative to the high/low range over a set number of periods. The ide...

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The stochastics indicator is a momentum indicator that shows the location of the current closing price relative to the high/low range over a set number of periods. The stochastics indicator tries to ...

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Stock, also known as equity, represents ownership interests in corporations. Whether you own one, 100 or 100 million shares of stock in a company, you're an owner of the company. Corporations sel...

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Dividends are a distribution of corporate earnings to shareholders and usually take place in one of two forms -- cash or stock. A stock dividend is the latter of these two kinds of dividends. Each org...

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The Stock Exchange Daily Official List code is a unique identifier generated by the London Stock Exchange for securities issued in the U.K.Each U.K.-issued security traded on the London Stock Exchange...

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The stock market crash of 1929 is the most famous stock market crash of all time. On just one day (October 24, 1929), panicked sellers traded nearly 13 million shares on the New York Stock Exchange (m...

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A stock market index measures the change in the stock prices of the index's components.Let's say we want to measure the performance of the U.S. stock market. Assume there are currently four public com...

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A stock option gives the holder the right, but not the obligation, to purchase (or sell) 100 shares of a particular underlying stock at a specified strike price on or before the option's expiratio...

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A stock quote is an estimate of price or a price at which one party is willing to buy or sell a certain number of shares of stock from the other. A stock quote consists of a bid price and an ask price...

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Stock Return Income Debt Securities (STRIDES) are callable debt securities linked to an underlying stock. STRIDES are similar to callable preferred shares in that they take part in the fluctuation ...

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A stock savings plan is a Canadian taxation system that offers tax benefits to Canadian residents who purchase the initial public offerings (IPOs) of local companies. Each Canadian province has ...

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A stock split is a procedure that increases or decreases a corporation's total number of shares outstanding without altering the firm's market value or the proportionate ownership interest of ...

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A stock symbol -- also known as a ticker symbol -- is a string of letters used to identify a stock, bond, mutual fund, ETF or other security traded on an exchange. When a company goes public or ...

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A stockbroker is a person or a company that acts as an intermediary between buyers and sellers of stocks. Stockbrokers are often paid a commission, which is a percentage of the customer's purchas...

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A stop order (also called a stop-loss order or stop market order) is a trade order whereby the investor instructs the broker to automatically sell the stock if it drops to a certain price.For example,...

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A stop limit order is a tool that is used to help traders limit their downside risk when buying or selling stocks. To do this, it combines two other types of orders: a stop order and a limit order...

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A stop-loss order (also called a stop order or stop market order) is an order whereby the investor instructs the broker to automatically sell the stock if it drops to a certain price. For example, le...

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Straight line basis refers to a method of calculating the depreciation of an asset. Straight Line Basis calculates depreciation which is an accounting measure of the "loss" of value of an...

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The Straits Times Index is Singapore's premier equity index and the most widely used benchmark for the performance of equities traded on the Singapore Stock Exchange. The index is comprised of 55 of ...

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Strategic asset allocation is the practice of realigning a portfolio's asset composition in order to accommodate changes in market climate.Portfolios are made up of different asset classes, with e...

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A strategic buyout is a merger wherein one company acquires another based on the belief that the synergy of their combined operational capabilities will generate higher profits than if the two had rem...

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A stratified sampling approach is an indexing strategy whereby a fund manager divides an index into different "cells" that represent different characteristics of the index. The fund manager th...

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The street expectation is the commonly-held estimate of a company's future performance by market analysts.Market analysts consider economic conditions, consumer sentiment, research and development...

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The strike price is the specified price at which an option contract can be exercised.Strike prices are fixed in the option contract. For call options, the option holder has the right to purchase the u...

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STRIPS stands for Separate Trading of Registered Interest and Principal of Securities. They are securities that represent the separate interest and principal components of Treasury securities. Th...

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Strong-form efficiency is a component of the random walk theory and states that market and securities prices are not random and are influenced by past events. Strong-form efficiency is the opposite of...

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Structural unemployment is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market. Structurally unemployed...

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Structured finance is a complex financial instrument offered to borrowers with unique and sophisticated needs. Generally, a simple loan will not suffice for the borrower so these more complex and risk...

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A structured portfolio is a type of passively managed portfolio whose cash inflows are designed to meet the cash outflow requirements to fulfill a future obligation. A structured portfolio is also re...

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For the majority of Americans, taking on a student loan is a requirement to pay for college. A 2019 report estimated that 43 million American adults have federal student loans – with a combined tota...

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Subordinate means "ranks beneath." In finance, the term usually refers to the claims a creditor has on a company's assets relative to other creditors.When something is subordinate, it rank...

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Subordinated debt is any outstanding loan that, should the borrowing company fail, it will be repaid only after all other debt and loans have been settled. It is the opposite of unsubordinated de...

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Subscription privileges are a clause in an option, security, or merger agreement that gives the investor the right to maintain his or her percentage ownership of a company by buying a proportionate nu...

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Subscription rights are a clause in an option, security, or merger agreement that gives the investor the right to maintain his or her percentage ownership of a company by buying a proportionate number...

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The suicide pill is a takeover defense mechanism whereby a target company takes self-destructive measures to thwart a hostile takeover.If a company becomes the target of a hostile takeover by another ...

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The Super Bowl Indicator, also known as the Super Bowl Effect, is a theory that stock prices will fall if the AFC team wins the Super Bowl. The Super Bowl is the final game in the National Football L...

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Supply chain management (SCM) is the central organization of a company's production resources and materials intended to streamline the production process and reduce costs on a continuing basis.A c...

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In technical trading analysis, support is a lower limit in a price channel in which a security’s price tends to stay. Price channels can slope up (indicating bullish sentiment) or down (indicati...

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A support level is the price at which stock buyers jump in to purchase shares, establishing a floor beneath which it's difficult for the price to fall.Support, along with its cousin, resistance, a...

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A surrender fee is a fee paid by an annuity investor to withdraw some or all of his or her principal before the annuity's surrender period has expired.An annuity is a contract whereby an investor ...

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The surrender period is the time an investor of annuity must wait until they may take a withdrawal from their annuity without paying a penalty or surrender fee.The surrender period is usually stated i...

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Survivorship bias occurs when companies that no longer exist -- due to bankruptcy, acquisition or any other reason -- are not accounted for when calculating investment returns. For example, suppo...

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The sustainable growth rate represents how quickly a company can expand using only its own sources of funding. A company's sustainable growth rate is expressed mathematically in the following way: ...

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A swap is an agreement between two parties to exchange a series of future cash flows.Swaps are financial agreements to exchange cash flows. Swaps can be based on interest rates, stock indices, foreign...

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A swap spread is the difference between the fixed rate component of a given swap and the yield on a Treasury item or other fixed-income investment with a similar maturity.Companies engage in swaps in ...

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 Sweat equity is the time and effort that people contribute to a project.Sweat equity is used to describe the non-financial investment that people contribute to the development of a project such ...

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A sweep account is a bank or brokerage account that automatically transfers amounts above a certain threshold into a higher interest-earning investment option. These transfers are made at the close of...

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Sweet crude is a type of yet-to-be refined oil which contains minimal amounts of impurities.Sweet crude oil meets standards for low levels of contaminants such as sulfur (below one percent). In additi...

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Swing trading is a short-term strategy used by traders to buy and sell stocks whose technical indicators suggest an upward or downward trend in the near future -- generally one day to two weeks. Swin...

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The term swipe fees, also known as interchange fees, refers to the hidden cost paid by merchants to card-issuing banks and credit card companies for processing credit card and debit card transactions....

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SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis uses internal and external data to evaluate a company's competitive status and risk exposures in strategic plann...

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The symmetrical triangle is one of three important triangle patterns defined in classical technical analysis. The other two triangles are the bullish ascending triangle pattern and the bearish descend...

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A syndicate is a group of lenders or underwriters that come together to share or participate in a specific loan or investment.A project may require too large of financial investment for a single lende...

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A syndicated loan is a loan made by a group of lenders who share or participate in a specific loan given to a project.A project may require too large a loan for a single lender or require a special ty...

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Synergy is the benefit that results when two or more agents work together to achieve something either one couldn't have achieved on its own.  It's the concept of the whole being greater than ...

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A synthetic collateralized debt obligation is a collateralized security which is backed by derivatives such as swaps and options contracts. A synthetic collateralized debt obligation, commonly called...

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A synthetic futures contract comprises call options accompanied by put options in order to imitate the attributes of a futures contract.A synthetic long futures contract can be simulated using a short...

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Also called market risk or non-diversifiable risk, systematic risk is the fluctuation of returns caused by the macroeconomic factors that affect all risky assets.  Unsystematic risk is the risk t...

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