What Is an ECN Broker? An ECN broker is a financial intermediary that uses electronic communications networks (ECNs) to give clients direct access to other participants in equity and currency markets. Because an ECN broker consolidates price quotations from several market participants, it can generally offer its clients tighter bid/ask spreads than would be otherwise available
What Is the Equal Credit Opportunity Act (ECOA)? The Equal Credit Opportunity Act (ECOA) is a federal civil rights law that forbids lenders to discriminate against loan applicants for any reason other than their ability to repay. Specifically, ECOA protects consumers from discrimination based on race, color, religion, national origin, sex, marital status, age, eligibility
What Is Electronic Commerce (Ecommerce)? Electronic commerce (ecommerce) refers to companies and individuals that buy and sell goods and services over the Internet. Ecommerce operates in different types of market segments and can be conducted over computers, tablets, smartphones, and other smart devices. Nearly every imaginable product and service is available through ecommerce transactions, including books
What Is Econometrics? Econometrics is the use of statistical and mathematical models to develop theories or test existing hypotheses in economics and to forecast future trends from historical data. It subjects real-world data to statistical trials and then compares the results against the theory being tested. Depending on whether you are interested in testing an
What is an Economic Derivative? An economic derivative is an over-the-counter (OTC) contract, where the payout is based on the future value of an economic indicator. It is similar to other derivatives in that it is designed to spread the risk to parties that are willing to take on risks to participate in the rewards.
What Is Earnest Money? Earnest money is a deposit made to a seller that represents a buyer’s good faith to make a purchase such as the acquisition of a new home. The money gives the buyer extra time to get financing and conduct the title search, property appraisal, and inspections before closing. In many ways
What Are Earning Assets? Earning assets are income-producing investments that are owned, or held, by a business, institution, or individual. These assets also have a base value and the ability to produce additional funds beyond the inherent value for the investment holder. This allows the investment holder to maintain the assets as a source of earnings or sell the assets
What Is an Earnings Announcement? An earnings announcement is an official public statement of a company’s profitability for a specific period, typically a quarter or a year. An earnings announcement occurs on a specific date during earnings season and is preceded by earnings estimates issued by equity analysts. If a company has been profitable leading
What Is Earnings Management? Earnings management is the use of accounting techniques to produce financial statements that present an overly positive view of a company’s business activities and financial position. Many accounting rules and principles require that a company’s management make judgments in following these principles. Earnings management takes advantage of how accounting rules are
What Is the Earnings Multiplier? The earnings multiplier is a financial metric that frames a company’s current stock price in terms of the company’s earnings per share (EPS) of stock, that’s simply computed as price per share/earnings per share. Also known as the price-to-earnings (P/E) ratio, the earnings multiplier can be used as a simplified valuation
