Robert F. Engle III is an econometrician and professor of economics at New York University. Engle won the 2003 Nobel Prize in Economics, along with Clive W.J. Granger, for their analysis of time-series data with time-varying volatility. Time-varying volatility is the fluctuation over time of the value of financial instruments, and Engle’s discoveries of the variations
What Is the Robinson-Patman Act? The Robinson-Patman Act is a federal law passed in 1936 to outlaw price discrimination. The Robinson-Patman Act is an amendment to the 1914 Clayton Antitrust Act and is supposed to prevent “unfair” competition. Key Takeaways The Robinson-Patman Act is a federal law intended to prevent price discrimination.The law prevents distributors
What Is a Robo-Advisor? A robo-advisor (also spelled as roboadvisor) is a digital platform that provides automated, algorithm-driven financial planning and investment services with little to no human supervision. A typical robo-advisor asks questions about your financial situation and future goals through an online survey. It then uses the data to offer advice and automatically
What Is a Robo-Signer? A robo-signer refers to an employee of a mortgage servicing company that signs paperwork such as foreclosure documents robotically without reviewing them. Rather than actually reviewing the individual details of each case, robo-signers assume the paperwork to be correct and sign it automatically – like robots. In some cases, software is
What Does Robust Mean? In the world of investing, robust is a characteristic describing a model’s, test’s, or system’s ability to perform effectively while its variables or assumptions are altered. A robust concept will operate without failure and produce positive results under a variety of conditions. For statistics, a test is robust if it still
What Is Return on Capital Employed (ROCE)? The term return on capital employed (ROCE) refers to a financial ratio that can be used to assess a company’s profitability and capital efficiency. In other words, this ratio can help to understand how well a company is generating profits from its capital as it is put to use. ROCE
What is a Rocket Scientist? Rocket scientist is a term coined by traditional traders for a person with a math and statistical research background doing quantitative work in investing and finance. The term dates to the 1970’s and was used tongue-in-cheek when Wall Street firms began employing researchers without finance or trading backgrounds to use
What Is Risk Analysis? The term risk analysis refers to the assessment process that identifies the potential for any adverse events that may negatively affect organizations and the environment. Risk analysis is commonly performed by corporations (banks, construction groups, health care, etc.), governments, and nonprofits. Conducting a risk analysis can help organizations determine whether they
What Is Risk Arbitrage? Risk arbitrage, also known as merger arbitrage, is an investment strategy to profit from the narrowing of a gap of the trading price of a target’s stock and the acquirer’s valuation of that stock in an intended takeover deal. In a stock-for-stock merger, risk arbitrage involves buying the shares of the target
What Is Risk Assessment? Risk assessment is a general term used across many industries to determine the likelihood of loss on an asset, loan, or investment. Assessing risk is essential for determining how worthwhile a specific investment is and the best process(es) to mitigate risk. It presents the upside reward compared to the risk profile.
