What Is a Random Variable? A random variable is a variable whose value is unknown or a function that assigns values to each of an experiment’s outcomes. Random variables are often designated by letters and can be classified as discrete, which are variables that have specific values, or continuous, which are variables that can have
What Is the Random Walk Theory? Random walk theory suggests that changes in stock prices have the same distribution and are independent of each other. Therefore, it assumes the past movement or trend of a stock price or market cannot be used to predict its future movement. In short, random walk theory proclaims that stocks
What Is a Range Accrual? A range accrual is a structured product based on an underlying index whose returns are maximized if the index stays within the investor’s defined range. Commonly referred to as a range accrual note, it is a type of financial derivative that offers investors the potential to earn above-average returns by
What Is a Range Forward Contract? A range forward contract is a zero-cost forward contract that creates a range of exercise prices through two derivative market positions. A range forward contract is constructed so that it provides protection against adverse exchange rate movements while retaining some upside potential to capitalize on favorable currency fluctuations. Range Forward Contract Explained Range forward contracts
What Is a Revenue Agent’s Report? The Revenue Agent’s Report (RAR) is a detailed document that describes an IRS examiner’s audit findings and states the amount of deficiency or refund the agent finds the taxpayer to owe or be owed, respectively. Taxpayers have the right to disagree with a revenue agent’s report and can choose
What Is Quantity Demanded? Quantity demanded is a term used in economics to describe the total amount of a good or service that consumers demand over a given interval of time. It depends on the price of a good or service in a marketplace, regardless of whether that market is in equilibrium. The relationship between
What Is Quantity Supplied? In economics, quantity supplied describes the number of goods or services that suppliers will produce and sell at a given market price. The quantity supplied differs from the actual amount of supply (i.e., the total supply) as price changes influence how much supply producers actually put on the market. How supply
What Is a Quantity-Adjusting Option (Quanto Option)? A quantity-adjusting option, commonly called a Quanto option, is a cross-currency derivative in which the underlying asset is denominated in one currency but settlement is made in another currency at a predetermined exchange rate. Another name for these options is a guaranteed exchange rate option. Quanto options come
What Is a Quanto Swap? A quanto swap is a cash-settled, cross-currency interest rate swap, where one of the counterparties pays a foreign interest rate to the other. The notional amount is denominated in the domestic currency. Interest rates may be fixed or floating. Because they depend on the currency exchange rate and differences in
What Is Quantum Computing? Quantum computing is an area of computer science that uses the principles of quantum theory. Quantum theory explains the behavior of energy and material on the atomic and subatomic levels. Quantum computing uses subatomic particles, such as electrons or photons. Quantum bits, or qubits, allow these particles to exist in more
