What Is the Pretax Rate of Return? The pretax rate of return is the return on an investment that does not include the taxes the investor must pay on this return. Because individuals’ tax situations differ and different investments attract varying levels of taxation, the pretax rate of return is the measure most commonly cited
What Is the Previous Balance Method? The term “previous balance method” describes one of many methods for calculating interest payments that are used by credit card companies. Under the previous balance method, the amount of interest charged each month is based on the balance of debt outstanding on the card as of the beginning of
What Is Price Continuity? Price continuity is a characteristic of a liquid market in which the bid-ask spread, or difference between offer prices from buyers and requested prices from sellers, is relatively small. Price continuity reflects a liquid market, for which there are many buyers and sellers for a given security. Price continuity should not
What Is Price Level? Price level is the average of current prices across the entire spectrum of goods and services produced in an economy. In more general terms, price level refers to the price or cost of a good, service, or security in the economy. Price levels may be expressed in small ranges, such as
What Is Price Level Targeting? Price level targeting is a monetary policy framework that can be used to achieve price stability. LPrice level targeting is a technique in monetary policy, where the central bank increases or decreases the supply of money and credit in the economy in order to achieve a specified price level. Price
What Is Price Rigging? Price rigging occurs when parties conspire to fix or inflate prices to achieve higher profits at the expense of the consumer. Also known as “price fixing” or “collusion,” price rigging can take place in any industry and is usually illegal. As a term, “price rigging” is most commonly used in British
What Is Price Stickiness? Price stickiness, or sticky prices, is the resistance of market price(s) to change quickly, despite shifts in the broad economy suggesting a different price is optimal. “Sticky” is a general economics term that can apply to any financial variable that is resistant to change. When applied to prices, it means that
What Is Price Talk? Price talk is the discussion of the appropriate price for an upcoming security issue. During the price talk phase, the investment community will discuss and debate a reasonable range of prices within which it’s estimated the new security should be sold. Price talks commonly occur before an initial public offering (IPO)
What Is Price Action? Price action is the movement of a security’s price plotted over time. Price action forms the basis for all technical analyses of a stock, commodity or other asset charts. Many short-term traders rely exclusively on price action and the formations and trends extrapolated from it to make trading decisions. Technical analysis
What Is Pre-foreclosure? Pre-foreclosure refers to the first phase of a legal proceeding that ultimately can conclude in a property being repossessed from a defaulted borrower. The lender files a notice of default on the property in pre-foreclosure because the borrowing owner exceeds the contractual terms for delinquent payments. A notice of default informs the borrowing owner
