Yield is a measure of the return on investment (appreciation, dividends, interest, etc.). Yield is normally expressed as a percentage rate. For example, yield on a savings account might be 0.2% per year
Author: ArulNigam
Bootstrapping is the process of funding and building a company using only a personal investment and profits from sales, as opposed to using a loan and/or venture capital investment.
A leveraged buyout or LBO is a strategy used by firms to acquire other companies. An LBO finances the acquisition of the company by borrowing money (therefore leveraging the firm making the acquisition) to cover the acquisition cost.
Arbitrage is the purchase and resale of some good in different markets at a premium without adding any value. For example, let us say that the price of a bushel of blue crabs is $300 in Baltimore, Maryland, but a bushel of the same blue crabs would go for $325 in Washington, DC. Then, it would be wise for me to buy blue crabs in Baltimore and immediately sell them in Washington, at a profit of $25 per bushel (ignoring the cost of transportation). Note that arbitrage only applies to goods, and not services. Although arbitrage could occur in any context, when we say arbitrage we are usually referring to the stock market, where some security can be bought on one market and resold on another at a higher price. In an efficient market, this should not be possible. But since people take time to make decisions and there are transaction costs are present, arbitrage is possible.
Product / market fit describes the phenomenon of consumption growing perfectly with production. In other words, as it is commonly explained, “customers buy your product as fast as you can make it.”
Short-selling, or simply shorting, is a strategy employed when you believe that the value of some stock will fall. You begin by borrowing a certain number of shares from someone. Then, you sell the shares and buy them back at a lower price-point. Now, you have the same number of shares as before (which you then return to the original owner) as well as cash equivalent to the difference between the price when you borrowed and returned the shares. Shorting is used commonly to bet against a company.
Private Equity funds invest directly in companies that are not listed on public exchanges. They may also execute takeovers of publicly-listed firms and delist them, making them private.
High-frequency Trading or HFT uses powerful computing systems and complex algorithms to detect small variations in asset prices and then conducts trades at high volume in a fraction of a second.HFT accounts for about half of all trades made in equity markets. High-frequency traders trade billions of shares per day.
A stock exchange is a medium through which traders can buy and sell financial instruments, including stocks, bonds, and derivatives. The New York Stock Exchange is one of the most prominent exchanges. Trades occur both online and physically.
A unicorn is a start-up valued at over $1 billion.
