Anti-Reciprocal Rule (FINRA) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is the Anti-Reciprocal Rule?The Anti-Reciprocal Rule is a regulation by the Financial Industry Regulatory Authority (FINRA) that prohibits a mutual fund manager and a brokerage firm from colluding to engage in business transactions that will affect a client...

Residual Sum of Squares – Explained

by TheBusinessProfessor | Feb 23, 2025 | Research, Quantitative Analysis, & Decision Science

Update Table of Contents What is the Residual Sum of Squares?How is the Residual Sum of Squares (RSS) Used?Academic Research on the Residual Sum Of Squares What is the Residual Sum of Squares?A Residual sum of square tells you how much of the dependent variables...

Q Ratio (Tobin’s Q) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles

What is a Q Ratio (Tobin’s Q)?The Tobins Q ratio is the ratio between the market value of physical assets and their replacement value or cost. The Tobins Q ratio was first proposed by Nicholas Kaldor, an economist in 1966. This ratio was further popularized by...

Centralized Market – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Centralized Market?A centralized market is a financial market free of competing parties (markets). A centralized market is structured in a way that allows all orders (purchase and sale) to be transferred to a central exchange. There is an absence of...

Certified Valuation Analyst – Explained

by TheBusinessProfessor | Feb 23, 2025 | Professionalism & Career Development

What is a Certified Valuation Analyst?Certified Valuation Analyst (CVA) is a reputable business valuation credential awarded to industry professionals by The National Association of Certified Valuators and Analysts (NACVA).  To earn the CVA professional designation,...

Convexity (Bonds) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is Convexity?In the bond world, convexity is simply defined as a measure of the sensitivity of the bonds duration to change its yield. Convexity is believed to be a good measure for bond price changes that are accompanied by greater fluctuations in their interest...

Experimental Economics – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Experimental Economics?Experimental economics is a branch of economics where experimental methods are applied in the study of economic theories and economic behaviors. This branch of economics relies heavily on data, laboratory-controlled and scientifically...

Event Driven Strategy – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is an Event-Driven Strategy?A type of investment strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as a bankruptcy, restructuring, merger/acquisition, takeover or spinoff is known as an event driven...

Preferred Habitat Theory (Bond Trading) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is the Preferred Habitat Theory?The preferred habitat theory, a term structure, which is a variant of the liquidity premium theory; states that in addition to interest rate expectations, investors have distinct investment horizons and require a meaningful premium...

Federal Credit Union – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Federal Credit Union?A federal credit union is regulated by the National Credit Union Association (NCUA). This credit union offers banking services such as online banking, bill payment, checking accounts, issuance of loans, mortgages, and others. As...