Author: user

Investment Company Act of 1940 The Investment Company Act of 1940 establishes the regulatory framework for companies that pool money and invest in securities. Enforced by the U.S. Securities and Exchange Commission (SEC), the Act is designed to protect investors by requiring transparency, limiting conflicts of interest, and imposing operational standards on investment companies. Key…

Investment Companies: Structure, Types, and Key Points What is an investment company? An investment company is a pooled-asset vehicle—organized as a corporation, trust, partnership, or LLC—that invests investors’ collective capital in securities such as stocks, bonds, and commodities. Fund sponsors manage portfolios, provide record-keeping and custody, and offer investors a way to obtain diversification and…

Investment Clubs An investment club is a group of people who pool money to invest collectively. Clubs are typically organized as partnerships and make investment decisions together—often after group research and a majority vote. Meetings are frequently educational, and members usually take an active role in research, decision-making, and recordkeeping. Why join an investment club?…

Investment Center: Definition, Purpose, and Example Key takeaways * An investment center is a business unit that manages its own revenues, expenses, and assets and is evaluated on the returns it generates from those assets. * Typical examples include a captive finance arm of an automaker or a store-branded credit business for a retailer. *…

Investment Banking: What It Is and How It Works Investment banking organizes and manages large, complex financial transactions for corporations, governments, and other institutions. Typical activities include underwriting new securities, advising on mergers and acquisitions (M&A), and helping companies go public through initial public offerings (IPOs). Investment banks combine financial expertise, market access, and regulatory…

Investment Banker Investment bankers advise corporations, governments, and other large entities on raising capital and executing major financial transactions. They structure and manage activities such as public offerings, bond issuances, mergers and acquisitions, and company sales, guiding clients through valuation, pricing, regulatory requirements, and market execution. What investment bankers do Advise clients on capital-raising strategies…

Investment banks: functions, roles, and key issues Investment banks specialize in large, complex financial transactions and advisory services for corporations, governments, pension funds, and institutional investors. They act as intermediaries between clients and the capital markets, helping raise capital, structure deals, and provide strategic financial advice. Key takeaways Investment banks underwrite securities (IPOs, secondary offerings)…

Understanding Investment Analysis: Types and Importance Explained Key takeaways * Investment analysis evaluates securities, sectors, and economic trends to judge potential performance and fit for an investor’s goals. * Common approaches include top-down vs. bottom-up and fundamental vs. technical analysis. * Fundamental analysis assesses intrinsic value and financial health; technical analysis focuses on price patterns…

Investment Advisory Representative (IAR) Key takeaways * An IAR is a licensed individual who provides personalized investment advice and manages client accounts on behalf of a registered investment adviser (RIA) firm. * IARs must register with state regulators or the SEC, pass required exams (commonly Series 63/65 or Series 66 + Series 7), and meet…

Investment Adviser What is an investment adviser? An investment adviser is a financial professional who provides investment recommendations or conducts securities analysis for a fee. Advisers often manage client assets and owe a fiduciary duty—meaning they must put clients’ interests ahead of their own. The terms “investment adviser” and “financial adviser” are commonly used interchangeably….

Investment Advisers Act of 1940 The Investment Advisers Act of 1940 is a U.S. federal law that defines and regulates investment advisers, establishes fiduciary duties, and sets registration and disclosure requirements to protect investors and promote market integrity. Key takeaways Establishes a fiduciary duty: advisers must act in clients’ best interests (duty of loyalty and…

Investment: How and Where to Invest Definition An investment is an asset or property acquired to generate income (dividends, interest) or to gain appreciation (an increase in value over time). It generally involves committing resources today — money, time, or effort — in expectation of a greater payoff in the future. Where to Invest Stocks…

Investing: An Introduction Key takeaways * Investing means allocating money or other resources with the expectation of generating income, capital appreciation, or both. * Risk and return are linked: lower-risk assets generally offer lower expected returns; higher-risk assets offer higher potential returns. * You can invest directly (DIY), hire a professional, or use automated robo-advisors….

Indication of Interest (IOI) An Indication of Interest (IOI) is a non-binding expression that signals a buyer’s intent to purchase a security undergoing registration (such as before an IPO) or a company in an acquisition process. It communicates serious interest and key parameters but does not create a legal obligation to complete the transaction. Key…

Invested Capital: Definition and How to Calculate Returns (ROIC) Definition Invested capital is the total amount of capital a company raises from equity and debt to fund operations and long‑term growth. It represents the resources provided by shareholders and lenders that management deploys to buy assets, expand the business, and generate profits. What’s included Common…

Inverted Yield Curve: What It Is and Why It Matters Key takeaways * An inverted yield curve occurs when long-term bond yields fall below short-term yields. * It signals that investors expect weaker economic growth and lower future interest rates. * Historically, prolonged inversions have often preceded U.S. recessions, but they do not cause recessions….

Inverse Head and Shoulders: A Guide to Spotting and Trading Bullish Reversals The inverse head and shoulders is a classic technical-analysis pattern that signals a potential reversal from a downtrend to an uptrend. It consists of three troughs: two higher troughs (the shoulders) flanking a deeper middle trough (the head). A breakout above the connecting…

Inverse ETFs: Definition, How They Work, and Key Risks Inverse exchange-traded funds (inverse ETFs) are investment funds that aim to deliver the opposite — on a daily basis — of the performance of a benchmark index or sector. They achieve this by using derivatives such as futures, swaps, and options. Inverse ETFs provide a way…

Inventory Write-Off An inventory write-off is the formal recognition that part of a company’s inventory no longer has value. When inventory is obsolete, damaged, spoiled, stolen, or lost, the company removes that value from its books and records a loss. Write-offs reduce reported inventory on the balance sheet and reduce net income on the income…

Inventory Turnover Key takeaways Inventory turnover measures how many times a company sells and replaces its inventory over a period (usually a year). Formula: Inventory turnover = Cost of goods sold (COGS) / Average inventory. A high turnover generally indicates strong sales or efficient purchasing; a low turnover can signal overstocking or weak demand. Compare…

Inventory Management Key takeaways * Inventory management oversees ordering, storing, using, and selling a company’s stock—from raw materials to finished goods. * Good inventory management balances the costs and risks of stockouts (lost sales) and overstock (holding costs, spoilage, obsolescence). * Common methods include Just‑in‑Time (JIT), Materials Requirement Planning (MRP), Economic Order Quantity (EOQ), and…

Inventory Financing: Definition and Overview Inventory financing is a short-term loan or revolving line of credit that allows a business to purchase goods to sell later, using that inventory as collateral. It helps companies — especially small and mid-sized retailers and wholesalers — manage cash flow, smooth seasonal fluctuations, and build larger stock levels to…

Inventory Accounting What it is Inventory accounting is the area of accounting that assigns value to a company’s stock of goods and records changes in those values. Inventory typically exists in three stages: * Raw materials * Work in progress (WIP) * Finished goods ready for sale Accurate inventory accounting treats these items as assets…

Inventory: Definition, Types, Valuation, and Management Key takeaways * Inventory includes raw materials, work‑in‑progress (WIP), and finished goods used for production or held for sale. * Common valuation methods are FIFO, LIFO, and the weighted average method; the choice affects cost of goods sold (COGS), taxes, and reported profits. * Effective inventory management (for example,…

Introducing Broker (IB) Key takeaways An introducing broker (IB) advises clients in the futures markets and manages client relationships, but delegates trade execution and clearing to a futures commission merchant (FCM). IBs are registered with the Commodity Futures Trading Commission (CFTC) and regulated by the National Futures Association (NFA). The IB–FCM split lets each specialize:…

Intrinsic Value Intrinsic value is the fundamental, or “true,” worth of an asset based on its underlying characteristics and expected cash flows, rather than its current market price. The term is used differently in equity valuation and in options pricing. Key takeaways Intrinsic value for stocks estimates the present value of future cash flows. Intrinsic…

Intrapreneurship: What it Is and Why It Matters Intrapreneurship is the practice of applying entrepreneurial thinking inside an established organization. Intrapreneurs are employees who take initiative, experiment with new ideas, and lead projects that create value for their company—while using company resources and operating within its structure and risk boundaries. Key takeaways Intrapreneurship fosters innovation…

Understanding Intrapreneurs: Role, History, Traits, and Benefits An intrapreneur is an employee within an organization who is charged with developing innovative ideas, products, processes, or new business lines. Combining the notions of “internal” and “entrepreneur,” intrapreneurs pursue entrepreneurial initiatives while leveraging the resources, scale, and stability of an existing company. They typically face less personal…

Intraday Trading Explained: Strategies, Benefits, and Risks Key takeaways * Intraday refers to trading and price movements that occur within a single trading day. * Day traders open and close positions before the market closes, aiming to profit from short-term price fluctuations. * Common strategies include scalping, range trading, and news-based trading; execution tools such…

Intraday Momentum Index (IMI) The Intraday Momentum Index (IMI) is a short-term technical indicator that blends candlestick analysis with the relative strength index (RSI) concept to identify overbought and oversold conditions within trading days. Developed by Tushar Chande, the IMI measures the relationship between a security’s intraday open and close prices over a chosen lookback…

Intestate: What It Means and What Happens When Someone Dies Without a Will Dying intestate means passing away without a valid legal will. When that happens, a state probate court applies state intestate succession laws to decide how the deceased’s assets are distributed. This can lead to outcomes that differ from what the decedent might…

Inter-Vivos Trust (Living Trust) What it is An inter-vivos trust—commonly called a living trust—is a legal arrangement that holds and manages assets while the person who created it (the trustor or settlor) is alive. A trustee manages the trust assets for the benefit of named beneficiaries. The trustor can serve as trustee during their lifetime…

Intertemporal Choice Key takeaways Intertemporal choice refers to decisions that trade off immediate consumption or benefits against future consumption or benefits. Choosing to consume less today (saving or investing) can increase future consumption and utility; choosing to consume more now can reduce future options. Present bias—preferring immediate rewards over larger future gains—commonly influences individuals’ intertemporal…

Interpolation What is interpolation? Interpolation is a mathematical method for estimating unknown values that lie between known data points. In finance, it’s used to infer missing prices, yields, or other metrics by relying on the trend shown by surrounding observations. Interpolated values are commonly plotted on charts to help visualize price movement and support technical…

Interpolated Yield Curve (I Curve) An interpolated yield curve (I curve) estimates Treasury yields for maturities that are not directly observed in the market by using available on-the-run Treasury securities. It fills gaps between issued maturities so analysts and investors can derive continuous term structures for pricing, risk management, and macro forecasting. Key points The…