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ZEW Indicator of Economic Sentiment What it is The ZEW Indicator of Economic Sentiment measures expert expectations for Germany’s economy over the next six months. It is derived from the monthly ZEW Financial Market Survey, which polls roughly 350 economists, analysts, and financial professionals from banks, insurers, and corporations. How the indicator is constructed Respondents…

Zeta Model: Meaning, Formula, and Significance The Zeta Model (or Altman Z‑score) is a statistical model that estimates the probability a public company will go bankrupt within roughly two years. Developed in 1968 by Edward I. Altman, it combines several financial ratios into a single score used for credit screening and financial distress prediction. Formula…

Zero-Volatility Spread (Z‑Spread): Definition and Use The zero‑volatility spread, or z‑spread, is the constant yield spread that, when added to each point on the Treasury spot‑rate curve, makes the present value of a bond’s cash flows equal its market price. It expresses how much additional yield a bond must pay above risk‑free Treasuries to compensate…

Zero Uptick (Zero Plus Tick) A zero uptick (or zero plus tick) is a trade executed at the same price as the immediately preceding trade, where that price is higher than the previous different-priced trade. In other words, the last two trades are at the same price, and that price is above the prior transaction…

Zero-Sum Game Key takeaways A zero-sum game is a situation where one participant’s gain equals another’s loss — the net change is zero. Classic examples include chess and poker; many derivatives contracts (options, futures) are treated as zero-sum in finance. Most everyday transactions and long-term investing are non-zero-sum (positive-sum) because trade and production can increase…

Zero-Rated Goods What they are Zero-rated goods are items taxed at a 0% value-added tax (VAT) rate. Although VAT is applicable to the supply, the rate charged to the final purchaser is 0%, so no VAT is added to the sale price. Governments typically designate essential or socially important items as zero-rated to reduce consumer…

Zero-Proof Bookkeeping Zero-proof bookkeeping is a manual reconciliation technique used in double-entry accounting to verify that recorded transactions balance correctly. The method entails systematically subtracting posted entries from an ending balance so that a final result of zero indicates the ledger entries are in balance. How it works Double-entry foundation: In double-entry systems every transaction…

Zero Plus Tick A zero plus tick (also called a zero uptick) describes a trade that executes at the same price as the immediately preceding trade, but at a higher price than the last trade at a different price. It’s most commonly used for listed equities and is relevant to short-selling rules and short-term price…

Zero-Percent Financing: What It Is and How It Works Zero-percent financing is a promotional interest rate offered by retailers and lenders to encourage purchases of higher-cost items — think cars, appliances, or electronics. For a set promotional period, typically several months to a few years, borrowers pay little or no interest. These offers can make…

Zero-One Integer Programming Key takeaways * Zero-one (0–1) integer programming is an optimization method where decision variables take only the values 0 or 1, representing mutually exclusive yes/no choices. * It is used to model selection, assignment, scheduling, routing, and many binary decision problems (e.g., which projects to fund, whether to open a facility). *…

Zero-Lot-Line House Key takeaways A zero-lot-line house is built up to or very near the property line, leaving little or no side yard. These homes can be attached (townhouses, rowhouses) or detached (garden homes, patio homes). Advantages: lower lot cost, more interior square footage, lower exterior maintenance, and often a stronger sense of community. Disadvantages:…

What Is a Zero Liability Policy? A zero liability policy means a cardholder is not financially responsible for unauthorized charges on their credit or debit card in most cases. Issuers and card networks often extend protections beyond federal limits, but exact coverage and requirements vary. How Zero Liability Works When you report unauthorized transactions, your…

Zero Layoff Policy What it is A zero layoff (or no‑layoffs) policy is a company commitment not to terminate employees for business‑driven reasons such as economic downturns or industry slowdowns. It does not protect employees from dismissal for poor performance, ethical breaches, contract violations, or other disciplinary grounds. Key takeaways Protects employees from layoffs caused…

Zero-Investment Portfolio What it is A zero-investment portfolio is a set of positions whose net initial cost is zero: the proceeds from short positions fund the long positions so the portfolio requires no net equity when assembled. Conceptually, it is constructed so long and short dollar amounts offset exactly. Example: short $1,000 of Stock A…

Zero-Gap Condition A zero-gap condition occurs when a security opens at or very near the previous session’s close, producing no visible gap on the price chart. In other words, there is continuity between the prior close and the next open—no sudden jump up or down. Understanding this condition alongside the broader concept of stock gaps…

Zero-Floor Limit: Definition, How It Works, and Why It Matters What is a zero-floor limit? A zero-floor limit is a merchant policy requiring authorization for every card transaction, regardless of the amount. Unlike traditional floor limits—minimum amounts below which transactions could be accepted without authorization—zero-floor limits mean every purchase is checked and approved by the…

Zero-Dividend Preferred Stock Key takeaways * Zero-dividend preferred stock pays no periodic dividends; returns come from capital appreciation and sometimes a one-time lump-sum payment at the end of a defined term. * These shares rank ahead of common stock for dividends and claim on assets, but typically rank below bonds. * Issuers use them to…

Zero-Day Attack A zero-day attack exploits a software vulnerability that the developer or vendor does not yet know about. Because the flaw is unknown to the party responsible for fixing it, there are “zero days” to prepare a patch before the vulnerability can be exploited. How zero-day attacks work A previously unknown flaw exists in…

Zero-Coupon Swap A zero-coupon swap is an interest-rate derivative in which one counterparty pays a fixed amount as a single lump-sum at swap maturity, while the other pays floating-rate interest periodically (as in a plain-vanilla interest-rate swap). The defining feature is that the fixed leg is tied to a zero-coupon structure: a single payment at…

Zero-Coupon Mortgage: Definition, How It Works, Uses, Risks What is a zero-coupon mortgage? A zero-coupon mortgage is a long-term commercial loan structured as an accrual note: no periodic principal or interest payments are made during the life of the loan. Interest accrues (typically compounding) and is added to the outstanding principal. At maturity the borrower…

Zero-Coupon Inflation Swap (ZCIS) A zero-coupon inflation swap (ZCIS) is a derivative that exchanges a single fixed payment for a single inflation-linked payment at maturity. It transfers inflation risk between two parties: one pays a predetermined fixed amount (the fixed leg) and the other pays an amount tied to the change in an inflation index…

Zero-Coupon Convertible Key takeaways * A zero-coupon convertible is a bond that pays no periodic interest and can be converted into the issuer’s common stock at a specified conversion price or ratio. * Issued at a discount to par, it accretes in value to face (par) at maturity if not converted. * It combines creditor…

Zero-Coupon Certificate of Deposit (CD) What it is A zero-coupon CD is a fixed-term deposit sold at a discount to its face (maturity) value and pays no periodic interest. Instead, the return comes from the difference between the purchase price and the amount paid at maturity. These CDs are typically issued by banks and, when…

Zero-Coupon Bond: Definition, How It Works, and How to Calculate Key takeaways A zero-coupon bond pays no periodic interest (no coupons). It is sold at a deep discount and redeems at face (par) value at maturity. The investor’s return is the difference between purchase price and maturity value, which accrues as imputed (phantom) interest. Imputed…

Zero-Cost Strategy: What It Is, How It Works, and Examples Definition A zero-cost strategy is a trading or business decision structured to require no net upfront expenditure. The goal is to improve operations, hedge risk, or pursue investment returns without incurring additional initial cost. In practice, “zero-cost” often means premiums, proceeds, or resale values offset…

Zero Cost Collar A zero cost collar is an options strategy used to lock in gains on a long stock position while limiting downside risk. It combines buying an out-of-the-money (OTM) protective put with selling an OTM covered call, typically with the same expiration, so the premium paid for the put is offset by the…

Zero Capital Gains Rate What it is A zero capital gains rate means capital gains are taxed at 0% — no federal tax is due on the gain. Governments use this rate as an incentive to encourage investment in targeted areas or to provide tax relief to taxpayers whose taxable income falls below specific thresholds….

Zero-Bound Interest Rate: Meaning, History, Crisis Tactics Key takeaways * The “zero lower bound” (ZLB) is the idea that nominal short-term interest rates cannot fall below 0%, limiting conventional monetary policy. * In practice, central banks and markets have found ways around the ZLB: short-term yields have briefly dipped below zero and some central banks…

Zero-Bound: Definition, Purpose, and How It Works What is the zero-bound? The zero-bound is the practical lower limit for short-term interest rates set by a central bank. When policy rates reach zero (or very close to it), conventional rate cuts can no longer be used to stimulate economic activity. This constraint can leave policymakers facing…

Zero-Beta Portfolio A zero-beta portfolio is constructed so its systematic risk (beta) relative to a reference market index is zero. In theory, a portfolio with beta = 0 has no correlation with market movements and, under CAPM assumptions, should have an expected return equal to the risk-free rate. Key takeaways A zero-beta portfolio has zero…

Zero Basis Risk Swap (ZEBRA) A zero basis risk swap (ZEBRA) is an interest-rate swap structured so the floating rate a municipality receives exactly matches the floating rate on its outstanding debt. Because the floating receipts and the floating debt payments move one-for-one, the swap eliminates basis risk and is often called a “perfect swap”…

Zero-Based Budgeting (ZBB) Zero-based budgeting (ZBB) is a budgeting approach that requires every expense to be justified from a “zero base” for each new period. Instead of carrying forward prior budgets and applying incremental increases, ZBB builds the budget around current needs and strategic priorities. Key takeaways Every expense must be justified each budgeting cycle….

Zero Balance Card — What it is and how it works A zero balance card is a credit card that currently shows no outstanding balance. You can have a zero balance by either paying the card in full each billing cycle or by not using the card at all. Maintaining one or more zero balance…

Zero Balance Account (ZBA) A zero balance account (ZBA) is a business checking account that is kept at a $0 balance most of the time. When a payment or transaction occurs, funds are automatically transferred from a centralized master account into the ZBA in the exact amount needed. After transactions clear, remaining funds are typically…

Zcash (ZEC) Zcash is a cryptocurrency and blockchain protocol launched to offer stronger privacy than Bitcoin while retaining a public, auditable ledger. It enables selective transaction privacy—users can choose between transparent and shielded transactions—by applying advanced cryptographic proofs that verify transactions without revealing sender, recipient, or amount. Key features Privacy-first design: zk-SNARK proofs allow fully…