Sine Wave

AAA

DEFINITION of 'Sine Wave'

An geometric waveform that oscillates (moves up, down or side-to-side) periodically, and is defined by the function y = sin x. In other words, it is an s-shaped, smooth wave that oscillates above and below zero.

INVESTOPEDIA EXPLAINS 'Sine Wave'

The Composite Index of Lagging Indicators, one of three Business Cycle Indicators published by the Conference Board is known to resemble a sine wave since the measures that make up the index (i.e. ratios and interest rates) tend to oscillate between a range of values. For example, inflation is always kept between specified rates and if/once inflation meets or exceeds a specified limit, interest rates will be adjusted to either increase or decrease inflation so it is brought within a target range. Thus, as the rate of inflation increases, decreases or stays the same, interest rates will oscillate up and down to control an undesired rate of inflation.

RELATED TERMS
  1. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds ...
  3. Detrend

    In forecasting models, the process of removing the effects of ...
  4. Consumer Confidence Index - CCI

    A survey by the Conference Board that measures how optimistic ...
  5. Coincident Indicator

    A metric which shows the current state of economic activity within ...
  6. Federal Open Market Committee - ...

    The branch of the Federal Reserve Board that determines the direction ...
Related Articles
  1. What are leading, lagging and coincident ...
    Investing

    What are leading, lagging and coincident ...

  2. Economic Indicators To Know
    Retirement

    Economic Indicators To Know

  3. India Is Eclipsing China's Economy As ...
    Economics

    India Is Eclipsing China's Economy As ...

  4. Ebola's Economic Impacts on Liberia, ...
    Economics

    Ebola's Economic Impacts on Liberia, ...

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center