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Understanding Zakat: Rules, Calculation, and Key Considerations Zakat is an obligatory form of almsgiving in Islam and one of the five pillars of the faith. It requires eligible Muslims to donate a portion of their wealth annually to specified categories of beneficiaries. Zakat is intended to purify wealth, support the needy, and promote social welfare….

Zacks Investment Research What Zacks Investment Research is Zacks Investment Research is a U.S. firm that produces independent, data-driven investment research. Founded in 1978, it is best known for its quantitative focus on earnings-per-share (EPS) estimate revisions and for publishing the Zacks Rank—a numerical rating that signals expected stock performance. Explore More Resources › Read…

Z Tranche A Z tranche (or accrual tranche) is the lowest-ranked slice of a collateralized mortgage obligation (CMO). It receives no coupon payments while more senior tranches are outstanding. Instead, interest that would have gone to the Z tranche is used to accelerate principal repayment of the higher-priority tranches. The Z tranche’s interest accrues and…

Z-Test A Z-test is a statistical hypothesis test that uses the standard normal distribution (Z-distribution) to evaluate whether a sample mean (or difference of means) differs significantly from a hypothesized population value. It is most appropriate when the population standard deviation is known and the sample is large enough for the sampling distribution to be…

Z-Share: What It Means and How It Works Definition A Z-share is a class of mutual fund shares reserved for employees of the fund management company. These shares are commonly offered as part of compensation packages or employee benefit plans and are purchased directly through the fund company rather than through intermediaries. How Z-Shares Work…

Z-Score What it is A Z‑score (standard score) measures how far a single data point lies from the mean of a dataset, expressed in standard deviations. It shows whether a value is typical or unusual within a distribution: – Z = 0 → the value equals the mean. – Z > 0 → the value…

Z‑Bond: Definition, How It Works, and How to Minimize Risk Key takeaways A Z‑bond (accrual bond) is the final tranche of a collateralized mortgage obligation (CMO); it receives no cash payments until all other tranches are paid. Interest on a Z‑bond accrues and is added to principal, so payout at maturity includes both principal and…

Z: What This Designation on a Nasdaq Ticker Means Key takeaways * “Z” is a fifth‑letter suffix (appearing after a dot) used on Nasdaq tickers to indicate a miscellaneous or nonstandard issuance. * It signals that the security differs from a single issue of common or capital stock — for example, a depositary receipt, stub,…

Yuppie: Definition, History, and Today What is a yuppie? A yuppie—short for “young urban professional”—describes a young, city-based professional who is notably affluent and career-driven. The stereotype often includes a polished, preppy appearance and conspicuous consumption that signals business success. Explore More Resources › Read more Government Exam Guru › Free Thousands of Mock Test…

Yugen Kaisha (YK): Definition and History A yugen kaisha (YK) was a Japanese form of limited liability company used from 1940 until it was abolished by the 2005 Companies Act (effective May 1, 2006). After the law took effect, no new YKs could be formed and existing YKs were reorganized under the revised corporate law—commonly…

York Antwerp Rules: Overview The York Antwerp Rules are an established set of maritime regulations that govern how losses are apportioned when cargo is sacrificed (jettisoned) to save a ship and the remaining cargo. Originating in 1890 and amended several times since, they codify the ancient maritime principle known as the law of general average….

Yo‑Yo Market A yo‑yo market is a slang term for an unusually volatile market in which prices swing sharply up and down over short periods. Like the toy, security prices repeatedly rise and fall, producing no clear, sustained trend. These movements can occur over hours, days, or weeks and often involve large portions of the…

Yield to Worst (YTW) What is Yield to Worst? Yield to Worst (YTW) is the lowest yield an investor can receive on a bond if the bond is redeemed before its stated maturity under the terms of the contract (for example, if the issuer calls the bond). YTW assumes the bond operates within its contractual…

Yield to Maturity (YTM) Yield to Maturity (YTM) is the annualized internal rate of return (IRR) on a bond if you hold it to maturity and reinvest coupon payments at the same yield. It equates the present value of all future cash flows (coupon payments and principal) to the bond’s current market price. Key points…

Yield to Call: Definition, Calculation, and Why It Matters What is yield to call (YTC)? Yield to call is the return an investor receives if a callable bond is held only until its earliest call date and the issuer redeems it at the specified call price. Callable bonds give the issuer the right to repurchase…

Yield-to-Average Life: What it Is and How It Works Yield-to-average life (YTAL) measures a bond’s yield using its weighted average maturity (average life) rather than the stated final maturity. It estimates the time and return profile assuming principal is repaid over time instead of in one lump sum. Key points * YTAL replaces the bond’s…

Yield-Tilt Index Funds What they are A tilt fund is an index-based mutual fund or ETF that holds a core portfolio designed to track a broad benchmark while deliberately “tilting” weight toward specific securities or factors to try to outperform that benchmark. A yield-tilt index fund specifically overweights stocks with higher dividend yields (or other…

Yield Spread Premium (YSP) A yield spread premium (YSP) was a form of compensation paid to mortgage brokers by lenders when a broker placed a borrower in a loan with an interest rate above the lender’s par rate for which the borrower qualified. The excess yield—effectively an elevated interest rate—generated payment to the broker, which…

Yield Spread: Definition, How It Works, and Types Definition A yield spread is the difference between the yields of two debt instruments. It’s usually expressed in percentage points or basis points (1% = 100 basis points). Spreads compare bonds that differ by issuer, credit quality, maturity, or embedded options. How it’s calculated Subtract one bond’s…

Yield Pickup What it is A yield pickup is the additional yield an investor gains by selling a lower-yielding bond and buying a higher-yielding one. The objective is to improve income and potentially risk-adjusted returns within a fixed-income portfolio. How the strategy works The strategy involves swapping bonds that pay less interest for bonds that…

Yield on Earning Assets — What it Is and How It Works Yield on earning assets is a financial solvency ratio that measures how much interest income a firm generates from its earning assets. It indicates how efficiently a financial institution uses loans and other interest‑bearing investments to produce income. Definition and formula Yield on…

Yield on Cost (YOC) What it is Yield on Cost (YOC) measures the dividend return on an investment based on the price you originally paid, not the stock’s current market price. It shows how much dividend income your original outlay is generating today and highlights the impact of dividend growth over time. How to calculate…

What is yield maintenance? Yield maintenance is a prepayment penalty designed to make lenders or investors “whole” if a borrower repays a loan or a bond is called before maturity. It compensates for the interest income the lender expected to receive over the remaining life of the loan by requiring the borrower to pay the…

Tax-Equivalent Yield Overview Tax-equivalent yield (TEY) is the taxable yield a bond must offer to match the after-tax return of a comparable tax-exempt investment, typically a municipal bond. Investors use TEY to compare tax-exempt and taxable fixed-income options on an apples-to-apples basis. The result depends on an investor’s marginal tax rate (including applicable state taxes)….

Yield Curve Risk What is yield curve risk? Yield curve risk is the potential for losses on fixed-income investments when market interest rates change and the yield curve shifts. The yield curve plots interest rates (y-axis) against bond maturities (x-axis), typically from short-term bills to long-term bonds. Because bond prices move inversely to yields, changes…

Yield Curve A yield curve is a graph that plots the interest rates (yields) of bonds with the same credit quality across different maturities. It shows the relationship between yield and time to maturity and is used as a benchmark for many interest rates in the economy and a predictor of economic conditions. How the…

Yield Basis: What It Means and How It Works The yield basis is a method of quoting fixed‑income securities (such as bonds) as a yield percentage rather than as a dollar price. Quoting by yield makes it easier to compare bonds with different coupon rates, prices, maturities, and credit qualities. How yield basis is calculated…

Yield-Based Option: Meaning, Types, Pros and Cons What is a yield-based option? A yield-based option (also called an interest-rate option) is a derivative that gives the buyer the right, but not the obligation, to buy or sell based on the yield of a security rather than its price. The option’s underlying value is equal to…

Yield in Finance: Formula, Types, and What It Tells You Definition Yield is the cash income an investor receives from an asset, expressed as a percentage of the investment. It typically includes interest payments or dividends and is usually reported on an annual basis. Yield is a measure of income, not the same as total…

Yen ETFs: What They Are, How They Work, Pros & Cons, and Examples What is a yen ETF? A yen ETF is an exchange-traded fund that tracks the value of the Japanese yen (JPY) relative to another currency (commonly the U.S. dollar) or to a basket of currencies. Instead of trading forex directly, investors can…

Yellow Sheets — what they are and how they work Yellow sheets are market bulletins that list corporate bonds traded over-the-counter (OTC). They provide traders and brokers with quote and trading data for bonds issued by companies that are not listed on a national exchange. What information appears on yellow sheets Typical data included: *…

Yellow Knight A yellow knight is a company that begins with a hostile takeover bid but then abandons the aggressive approach and proposes a merger of equals with the target instead. The shift typically reflects a reassessment of costs, takeover defenses, or bargaining position. Key takeaways A yellow knight starts as a hostile bidder and…

Year’s Maximum Pensionable Earnings (YMPE) Overview The Year’s Maximum Pensionable Earnings (YMPE) is the annual earnings cap used to determine the maximum amount on which contributions to the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP) are calculated. It sets the upper limit for pensionable earnings in a calendar year and therefore affects…

Years Certain Annuity: What It Is and How It Works What it is A years certain annuity (also called a period certain annuity, annuity certain, fixed period annuity, or guaranteed period annuity) is a retirement income product that pays a steady stream of periodic payments—typically monthly—for a specified number of years. Payments continue for the…

Yearly Renewable Term (YRT) Reinsurance What it is Yearly Renewable Term (YRT) reinsurance is a reinsurance arrangement where the ceding insurer transfers mortality (or morbidity) risk to a reinsurer on an annually renewable basis. The reinsurer charges a rate per unit of sum insured (e.g., per $1,000 of death benefit) that is reviewed and reset…