Financial Theory Terms

  1. Investment Multiplier

  2. Investment Philosophy

  3. Investment Style

  4. Investment Thesis

  5. Invisible Hand

  6. Irrational Exuberance

  7. Irrelevance Proposition Theorem

  8. Isoquant Curve

  9. Iterated Prisoner's Dilemma

  10. iTraxx LevX Indexes

  11. J-Curve Effect

  12. January Barometer

  13. Jarrow Turnbull Model

  14. Jean-Baptiste Say

  15. Jensen's Measure

  16. Jerry A. Hausman

  17. Jingle Mail

  18. Job Openings and Labor Turnover Survey - JOLTS

  19. John B. Taylor

  20. John Bogle

  21. K-Percent Rule

  22. K-Ratio

  23. Kaizen

  24. Kappa

  25. Karl Marx

  26. Kiasu

  27. Kondratieff Wave

  28. Kondratiev Wave

  29. Kurtosis

  30. Labor Intensive

  31. Labor Theory Of Value

  32. Laissez Faire

  33. Lanchester Strategy

  34. Lattice-Based Model

  35. Law of Diminishing Marginal Returns

  36. Law Of Diminishing Marginal Utility

  37. Law Of Large Numbers

  38. Law Of One Price

  39. Leadership Grid

  40. Least Preferred Coworker Scale

  41. Least Squares Method

  42. Lemons Problem

  43. Level 1 Assets

  44. Leverage Build Up

  45. Leveraged Floater

  46. Leveraged Loan Index - LLI

  47. Liability Driven Investment - LDI

  48. Liability Matching

  49. Licensed International Financial Analyst - LIFA

  50. Life-Cycle Hypothesis (LCH)

  51. Limited Liability

  52. Lindahl Equilibrium

  53. Linear Relationship

  54. Linked Exchange Rate System

  55. Lintner's Model

  56. Liquefied Natural Gas

  57. Liquidity Event

  58. Liquidity Path

  59. Liquidity Premium

  60. Liquidity Ratios

  61. Liquidity Squeeze

  62. Loan Commitment

  63. Log-Normal Distribution

  64. Long Inverse Floating Exempt Receipt - LIFER

  65. Long Run

  66. Long Tail

  67. Longevity Derivatives

  68. Longitudinal Data

  69. Look-Ahead Bias

  70. Loophole

  71. Loose Credit

  72. Lorenz Curve

  73. Loss Psychology

  74. Lucrative

  75. Lump-Sum Payment

  76. Make To Order - MTO

  77. Marginal Rate Of Transformation

  78. Marginal Social Cost - MSC

  79. Marginalism

  80. Market Cycles

  81. Market Discipline

  82. Market Economy

  83. Market Efficiency

  84. Market Letter

  85. Market Power

  86. Market Proxy

  87. Market Psychology

  88. Market Risk

  89. Market Segment

  90. Market Segmentation

  91. Market Segmentation Theory

  92. Market Share

  93. Market Value Added - MVA

  94. Marketing Mix

  95. Markowitz Efficient Set

  96. Martingale System

  97. Marxian Economics

  98. Marxism

  99. Matching Pennies

  100. Mathematical Economics

Hot Definitions
  1. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following:
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
  3. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious debt when government leaders use borrowed funds in ways that don't benefit or even oppress citizens. Some legal scholars argue that successor governments should not be held accountable for odious debt incurred by earlier regimes, but there is no consensus on how odious debt should actually be treated.
  4. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
  5. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by additional investment would not warrant the expense. A harvest strategy is employed when a line of business is considered to be a cash cow, meaning that the brand is mature and is unlikely to grow if more investment is added.
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
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