Investment Terms

The term securities-based lending refers to the practice of making loans using securities as collateral.
Securities-based lending provides ready access to capital that can be used for almost any purpose such as buying real estate, purchasing property like jewelry or a sports car, or investing in a business.
The only restrictions to this kind of lending are other securities-based transactions like buying shares or repaying a margin loan.
Generally offered through large financial institutions and private banks, securities-based lending is mostly available to people who have a significant degree of wealth and capital.
People tend to seek out securities-based loans if they want to make a large business acquisition or if they want to execute large transactions like real estate purchases.
Such loans may also be used to cover tax payments, vacations, or luxury goods.

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An exchange rate is a rate at which one currency will be exchanged for another currency and affects trade and the movement of money between countries.
Exchange rates are impacted by both the domestic currency value and the foreign currency value.
The exchange rate between two currencies is commonly determined by the economic activity, market interest rates, gross domestic product, and unemployment rate in each of the countries.
Commonly called market exchange rates, they are set in the global financial marketplace, where banks and other financial institutions trade currencies around the clock based on these factors.
Changes in rates can occur hourly or daily with small changes or in large incremental shifts.

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At its core, Ethereum is a decentralized global software platform powered by blockchain technology. It is most commonly known for its native cryptocurrency, ether.
Ethereum can be used by anyone to create any secured digital technology. It has a token designed to pay for work done supporting the blockchain, but participants can also use it to pay for tangible goods and services if accepted.
Ethereum is designed to be scalable, programmable, secure, and decentralized. It is the blockchain of choice for developers and enterprises creating technology based upon it to change how many industries operate and how we go about our daily lives.
It natively supports smart contracts, an essential tool behind decentralized applications.

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Inventory turnover is a financial ratio showing how many times a company turned over its inventory relative to its cost of goods sold in a given period.
A company can then divide the days in the period, typically a fiscal year, by the inventory turnover ratio to calculate how many days it takes to sell its inventory, on average.
The inventory turnover ratio can help businesses make better decisions on pricing, manufacturing, marketing, and purchasing. It is one of the efficiency ratios measuring how effectively a company uses its assets.
Inventory turnover measures how efficiently a company uses its inventory by dividing the cost of goods sold by the average inventory value during the period.
Inventory turnover ratios are only useful for comparing similar companies and are particularly important for retailers.

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The kiddie tax is a special tax law created in 1986 to address investment and unearned income tax for individuals 18 years of age or under or dependent full-time students under age 24.
The kiddie tax is imposed on individuals under a certain age 18 years old or under and full-time students age 19-24 years old whose investment and unearned income is higher than an annually determined threshold.
This rule is designed to prevent parents from exploiting a tax loophole where their children are given large gifts of stock. In this case, the child would then realize any gains from the investments and would be taxed at a far lower rate compared to the rate the guardians face for their realized stock gains.
Under the kiddie tax law, all unearned income over the threshold is taxed at the parent's marginal income tax rate rather than the child's tax rate. In 2021, unearned income under $1,100 qualifies for the standard deduction.

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A credit default swap is a financial derivative that allows an investor to swap or offset their credit risk with that of another investor. To swap the risk of default, the lender buys a CDS from another investor who agrees to reimburse them if the borrower defaults.
Most CDS contracts are maintained via an ongoing premium payment similar to the regular premiums due on an insurance policy.
A lender who is worried about a borrower defaulting on a loan often uses a CDS to offset or swap that risk.
A credit default swap is a derivative contract that transfers the credit exposure of fixed-income products. It may involve bonds or forms of securitized debt—derivatives of loans sold to investors.

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Bear market rally refers to a sharp, short-term rebound in share prices amid a longer-term bear market decline. Bear market rallies are treacherous for investors who mistakenly come to believe they mark the end of an extended downturn.
As the primary bearish trend reasserts itself, the disappointment of those who bought during a bear market rally helps to drive prices to new lows.
Bear market rallies are also known as dead cat bounces or sucker rallies.
A bear market is commonly defined as a stock market decline of 20% or more. At some point during the downturn, an orderly retreat typically turns into high-volume panic selling. Bargain hunters grow convinced capitulation is at hand, signifying at least a short-term market bottom.
Every bear market between 1901 and 2015, spawned at least one 5% rally. Rallies of 10% or more interrupted two-thirds of the 21 bear markets over that span.

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Government bonds in the U.K., India and several other Commonwealth countries are known as gilts. Gilts are the equivalent of U.S. Treasury securities in their respective countries. The term gilt is often used informally to describe any bond that has a very low risk of default and a correspondingly low rate of return.
They are called gilts because the original certificates issued by the British government had gilded edges.
Gilts are government bonds, so they are particularly sensitive to interest rate changes. They also provide diversification benefits because of their low or negative correlation with stock markets. Gilts often respond strongly to political events, such as Brexit.
Gilts may be conventional gilts issued in nominal terms or index-linked gilts, which are indexed to inflation. Governments issue conventional gilts in the national currency, and they do not make adjustments for inflation. Index-linked gilts make payments for inflation, so they are quite similar to U.S. Treasury Inflation-Protected Securities.

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The Reserve Bank of Australia is the central bank of Australia. The bank sets the country's monetary policy and issues and manages the Australian dollar. The RBA is involved in banking and registry services for federal agencies and some international central banks.
The bank, entirely owned by the Australian government, was established in 1960. Philip Lowe currently serves as Governor. He succeeded Glenn Stevens in 2016.
The Reserve Bank of Australia manages the Australian dollar by setting the interest rate in overnight money markets. This interest rate filters through the rest of the financial system, affecting the rates at which banks will lend to businesses and consumers. The goal of the Reserve Bank of Australia is to set the interest rate low enough to promote maximum Australian employment and economic growth, but not so low that it sparks inflation above 2% to 3% per year.

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A dot plot, also known as a strip plot or dot chart, is a simple form of data visualization that consists of data points plotted as dots on a graph with an x- and y-axis.
These types of charts are used to graphically depict certain data trends or groupings. The most famous dot plot is perhaps the Federal Reserve’s projections for interest rates that are published each quarter.
A dot plot is similar to a histogram in that it displays the number of data points that fall into each category or value on the axis, thus showing the distribution of a set of data.

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