What Is a Benchmark? A benchmark is a standard against which something is compared. Investors use benchmarks to measure the performance of securities, mutual funds, exchange-traded funds, portfolios, or other investment instruments. Generally, broad market and market-segment stock and bond indexes are used for this purpose—even cryptocurrencies have benchmarks, hallmarking the importance of having something to compare
What Is a Benchmark Bond? A benchmark bond is a bond that provides a standard against which the performance of other bonds can be measured. Government bonds are almost always used as benchmark bonds such as on-the-run U.S. Treasuries. A benchmark bond is sometimes referred to as an example of a benchmark issue or bellwether
What Is Benchmark Crude Oil? Benchmark crude oil is the petroleum that serves as a pricing reference for other types of oil and oil-based securities. The benchmark or crude oil markers make it easier for traders, investors, analysts, and others to determine the prices of multiple grades of crude oil varieties and blends. The management of
What Is a Benchmark for Correlation Values? A benchmark for correlation values is a benchmark, or specific point of reference, that an investment fund or individual investor uses to measure important correlation values of their portfolios, such as beta, which measures the volatility of a security to the market as a whole, or R-squared, a
What Is Beneficial Interest? A beneficial interest is the right to receive benefits on assets held by another party and is often evident in matters concerning trusts. Most beneficial interest arrangements are in the form of trust accounts, where an individual, the beneficiary receives income from the trust’s holdings but does not own the account.
What is a BAX Contract? A BAX contract is a short-term investment instrument that tracks the nominal value of a Canadian bankers’ acceptance (BA). The specific BA behind the contract has a nominal value of C$1 million and a maturity of three months. They were first launched in 1988 by the Montreal Exchange and has since gained traction
What Is Bayes’ Theorem? Bayes’ Theorem, named after 18th-century British mathematician Thomas Bayes, is a mathematical formula for determining conditional probability. Conditional probability is the likelihood of an outcome occurring, based on a previous outcome having occurred in similar circumstances. Bayes’ theorem provides a way to revise existing predictions or theories (update probabilities) given new or additional
What Is Bay Street? Bay Street lies at the heart of Toronto’s downtown business district and is often used as a catchword for Canada’s financial industry, just as Wall Street has come to be a shorthand for the U.S. financial services industry. Key Takeaways Bay Street is a street in Toronto’s downtown business district and
What Is a BCG Growth-Share Matrix? The Boston Consulting Group (BCG) growth-share matrix is a planning tool that uses graphical representations of a company’s products and services in an effort to help the company decide what it should keep, sell, or invest more in. The matrix plots a company’s offerings in a four-square matrix, with
What Is a B/C Loan? A B/C loan is a loan to low credit quality borrowers and borrowers with minimal credit history. This type of financing, which includes personal consumer loans and mortgages, is typically issued by alternative lenders charging high-interest rates and fees. They offer a second tier of loan eligibility to subprime or
