Oil Reserves

Oil reserves are an estimate of the amount of crude oil located in a particular economic region with the potential of being extracted. Reserves are calculated based on a proven probable basis and oil pools situated in unattainable depths are not considered part of a nation's reserves.

Harami Cross

A harami cross is a Japanese candlestick pattern that consists of a large candlestick that moves in the direction of the trend, followed by a small doji candlestick. The doji is contained within the prior candlestick’s body. The harami cross pattern suggests that the previous trend may be about to reverse. The pattern can be either bullish or bearish. The bullish pattern signals a possible price reversal to the upside, while the bearish pattern signals a possible price reversal to the downside.

October Effect

The October effect is a perceived market anomaly that stocks tend to decline during the month of October. The October effect is considered to be more of a psychological expectation than an actual phenomenon, as most statistics go against the theory. Some investors may be nervous during October because some large historical market crashes occurred during this month.Along with the September effect (which also predicts weaker markets during October), actual evidence for the existence of the October effect is not very solid. Indeed, October’s 100-year history has, in fact, been net positive despite being the month of the 1907 panic, Black Tuesday, Thursday, and Monday in 1929, and Black Monday in 1987, when the Dow plummeted 22.6% in a single day, (and remains arguably the worst single-day decline in market history on a percentage basis).

Jobless Recovery

A jobless recovery is a period in which the economy recovers from recession without reducing the unemployment rate.

Deadweight Loss

A deadweight loss is a cost to society created by market inefficiency, which occurs when supply and demand are out of equilibrium. Mainly used in economics, deadweight loss can be applied to any deficiency caused by an inefficient allocation of resources.Price ceilings, such as price controls and rent controls; price floors, such as minimum wage and living wage laws; and taxation can all potentially create deadweight losses. With a reduced level of trade, the allocation of resources in a society may also become inefficient.

Residual Dividend

A residual dividend is a dividend policy used by companies whereby the amount of dividends paid to shareholders amounts to what profits are left over after the company has paid for its capital expenditures (CapEx) and working capital costs.Companies that use a residual dividend policy fund CapEx with available earnings before paying dividends to shareholders. This means the dollar amount of dividends paid to investors each year will vary.

Winner'S Curse

The winner's curse is a tendency for the winning bid in an auction to exceed the intrinsic value or true worth of an item. The gap in auctioned versus intrinsic value can typically be attributed to incomplete information, emotions, or a variety of other subjective factors that may influence bidders.In general, subjective factors usually create a value gap because the bidder faces a difficult time determining and rationalizing an item's true intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

Reputational Risk

Reputational risk is a threat or danger to the good name or standing of a business or entity. Reputational risk can occur in the following ways:In addition to having good governance practices and transparency, companies need to be socially responsible and environmentally conscious to avoid or minimize reputational risk.

Factors Of Production

Factors of production are the inputs needed for creating a good or service, and the factors of production include land, labor, entrepreneurship, and capital.Those who control the factors of production often enjoy the greatest wealth in a society. In capitalism, the factors of production are most often controlled by business owners and investors. In socialist systems, the government (or community) often exerts greater control over the factors of production.

Production Efficiency

Production efficiency is an economic term describing a level at which an economy or entity can no longer produce additional amounts of a good without lowering the production level of another product. This happens when production is reportedly occurring along a production possibility frontier (PPF).Production efficiency may also be referred to as productive efficiency. Productive efficiency similarly means that an entity is operating at maximum capacity.

Production Costs

Production costs refer to all of the direct and indirect costs businesses face from manufacturing a product or providing a service. Production costs can include a variety of expenses, such as labor, raw materials, consumable manufacturing supplies, and general overhead.

Penetration Pricing

Penetration pricing is a marketing strategy used by businesses to attract customers to a new product or service by offering a lower price during its initial offering. The lower price helps a new product or service penetrate the market and attract customers away from competitors. Market penetration pricing relies on the strategy of using low prices initially to make a wide number of customers aware of a new product.The goal of a price penetration strategy is to entice customers to try a new product and build market share with the hope of keeping the new customers once prices rise back to normal levels. Penetration pricing examples include an online news website offering one month free for a subscription-based service or a bank offering a free checking account for six months.

Audit Risk

Audit risk is the risk that financial statements are materially incorrect, even though the audit opinion states that the financial reports are free of any material misstatements.

Auditor'S Report

An auditor's report is a written letter from the auditor containing their opinion on whether a company's financial statements comply with generally accepted accounting principles (GAAP) and are free from material misstatement.The independent and external audit report is typically published with the company's annual report. The auditor's report is important because banks and creditors require an audit of a company's financial statements before lending to them.

Kamikaze Defense

A Kamikaze defense is a defensive strategy sometimes resorted to by a company's management to prevent a takeover by another company.While these strategies are named after the suicidal kamikaze attacks used by Japanese pilots during World War II, they rarely destroy the company. Nevertheless, a kamikaze defense involves taking measures that are detrimental to the firm's business operations or financial condition. The idea is to reduce the target company’s attractiveness to a hostile bidder. A kamikaze defense is desperate, but the hope is that the takeover bid will be thwarted.

Esoteric Debt

Esoteric debt refers to debt instruments as well as other investments (called esoteric assets) that are structured in a way that few people fully understand. Esoteric debt is complex and can be a product of securitization, or simply arise through a complex financing arrangement. As such, the pricing of these securities can be contested or seem to be known to relatively few market participants. Moreover, the structure of these instruments may lead to deceptively attractive risk/return profiles over other investments when the instruments function properly, but can also lead to illiquidity and pricing problems when markets are disrupted.

Gentlemen'S Agreements

A gentlemen's agreement is an informal, often unwritten agreement or transaction backed only by the integrity of the counterparty to actually abide by its terms. An agreement such as this is generally informal, made orally, and is not legally binding.Despite their more casual nature, a violation of a gentlemen's agreement could have a negative effect on business relationships if one party decides to renege on their promise. A gentlemen's agreement (also spelled "gentleman's agreement") may or may not be consummated by a handshake.

Book Building

Book building is the process by which an underwriter attempts to determine the price at which an initial public offering (IPO) will be offered. An underwriter, normally an investment bank, builds a book by inviting institutional investors (such as fund managers and others) to submit bids for the number of shares and the price(s) they would be willing to pay for them.

Filing Status

Filing status is a category that defines the type of tax return form a taxpayer must use when filing their taxes. Filing status is closely tied to marital status.

Upstream Guarantee

An upstream guarantee, also known as a subsidiary guarantee, is a financial guarantee in which the subsidiary guarantees its parent company's debt.An upstream guarantee can be contrasted with a downstream guarantee, which is a pledge placed on a loan on behalf of the borrowing party by the borrowing party's parent company or stockholder.

Listed Option

An exchange-traded option is a standardized derivative contract, traded on an exchange, that settles through a clearinghouse and is guaranteed.