Understanding Arc Elasticity.

Arc elasticity is a measure of how much one variable changes in response to a change in another variable, and is calculated as the percentage change in the dependent variable divided by the percentage change in the independent variable. It is often used to measure the responsiveness of demand or supply to changes in price. … Read more

Negative Carry Definition.

The negative carry definition is when the cost of holding a position overnight is greater than the interest earned on that position. This can happen when a trader is long a currency with a lower interest rate than the interest rate of the currency they are borrowing. For example, if a trader is long EUR/USD … Read more

LIFO Reserve.

A LIFO reserve is an allowance that is created when a company reports inventory on its balance sheet using the last-in, first-out (LIFO) method. The LIFO reserve is the difference between the LIFO value of inventory and the cost of the same inventory using another valuation method, such as the first-in, first-out (FIFO) method. The … Read more

Z-Bond Definition.

A Z-Bond is a type of bond that has a coupon rate that is reset periodically based on changes in a reference rate, typically an interest rate index. The reference rate is applied to a notional amount to determine the coupon payments. Z-Bonds are also known as floating rate bonds or variable rate bonds. What … Read more