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High-Low Method: Separating Fixed and Variable Costs Key takeaways The high-low method separates total costs into fixed and variable components using only two data points: the highest and lowest activity levels. It provides a quick, simple estimate but can be inaccurate because it relies on extreme values and ignores intermediate data. Use it when detailed…

High-Low Index: Definition, Formula, and How to Use It What it is The High-Low Index measures market breadth by comparing the number of stocks making 52-week highs to those making 52-week lows. It helps confirm the prevailing trend of a broad market index: rising readings suggest broad participation in an uptrend, falling readings indicate widening…

High-Frequency Trading (HFT) What is HFT? High-frequency trading (HFT) uses advanced computer programs and sophisticated algorithms to execute very large numbers of orders in fractions of a second. By exploiting ultra-low-latency connections, co-location, and automated decision rules, HFT firms capitalize on small price differences and short-lived opportunities across markets. HFT is a form of algorithmic…

What is a High-Deductible Health Plan (HDHP)? A high-deductible health plan (HDHP) is a type of health insurance with a larger annual deductible than typical plans and lower monthly premiums. HDHPs are designed to shift more up-front cost responsibility to the insured while keeping regular premium costs lower. Many HDHPs qualify their enrollees to open…

Key Takeaways HENRYs (High Earners, Not Rich Yet) earn high incomes—typically in the upper-middle range—but lack the accumulated savings and investments that define lasting wealth. Common obstacles include high taxes, elevated cost of living, education and housing expenses, and debt. Luxury brands target HENRYs for their aspirational spending and future lifetime value. To move from…

What is a high close? A high close is a form of price manipulation in which traders execute trades at elevated prices during the final minutes (or seconds) of a trading session to push the official closing price higher. Because closing prices are widely watched—for charts, moving averages, derivatives, and mutual fund net asset values—artificially…

High Beta Index A high beta index is a collection of stocks that, as a group, are more volatile than a broad market benchmark such as the S&P 500. These indexes focus on companies whose share prices show greater sensitivity to market movements. What is beta? Beta measures an asset’s systematic risk relative to the…

Hierarchy-of-Effects Theory The hierarchy-of-effects theory describes how advertising guides a consumer from initial exposure to a final purchase. Developed by Robert J. Lavidge and Gary A. Steiner (1961), the model breaks the decision process into six sequential stages designed to shape what consumers think, feel, and ultimately do. The six stages Awareness (cognitive) Make the…

Hierarchical Deterministic (HD) Wallets: A Clear Guide Key takeaways * An HD wallet is a type of cryptocurrency wallet that derives an entire tree of key pairs from a single master seed. * The master seed (often a mnemonic phrase) lets you back up and recover all addresses and private keys with one secure copy….

Hidden Value: What It Is and How It Works Hidden values are assets whose true market worth is not reflected in a company’s reported book value or share price. Investors who search for hidden values aim to identify balance-sheet items that are undervalued by the market and may unlock future upside if recognized or realized….

Hidden Taxes: Understanding Their Impact on Consumers What are hidden taxes? Hidden taxes are indirect charges embedded in the price of goods and services that consumers often don’t notice. They’re designed to raise revenue or influence behavior without presenting an obvious, line-item tax to the buyer. Because they are not always visible, purchasing decisions may…

Heuristics: Definition, Pros & Cons, and Examples Key takeaways Heuristics are mental shortcuts or rules of thumb that speed decision-making by simplifying complex problems. They enable timely, “good-enough” decisions when information or time is limited, but can produce systematic biases and errors. Common heuristics include representativeness, anchoring, availability, confirmation bias, hindsight bias, and stereotyping. Awareness…

Heteroskedasticity Explained What is heteroskedasticity? Heteroskedasticity (also spelled heteroscedasticity) occurs when the variance of the error term or of a dependent variable is not constant across observations. In time series and cross-sectional data this shows up as changing scatter or volatility over time or across values of an independent variable. The opposite condition—constant variance—is called…

Heteroskedastic Definition Heteroskedasticity describes a condition in which the variance of the residual (error) term in a regression model is not constant across observations. When the spread of errors varies—often systematically with one or more explanatory variables—the model is heteroskedastic. The opposite condition, homoskedasticity, means the residual variance is constant or nearly so. Why it…

Heterodox Economics Key takeaways Heterodox economics encompasses economic theories and methods outside the mainstream Keynesian and neoclassical frameworks. It includes diverse—and sometimes conflicting—schools such as Marxism, post‑Keynesianism, the Austrian school, feminist economics, and behavioral approaches. Heterodox ideas can inform, challenge, or eventually become part of mainstream economics; they often use interdisciplinary methods and emphasize non‑market…

Heston Model Overview The Heston model is a stochastic volatility model used to price European options. Unlike Black–Scholes, which assumes constant volatility, the Heston model treats instantaneous variance as a random process that mean-reverts over time. This allows the model to capture common market features such as the volatility smile and skew. Key features *…

Hersey‑Blanchard Model (Situational Leadership) The Hersey‑Blanchard Model, commonly called Situational Leadership, recommends that no single leadership style fits every situation. Instead, leaders should adapt their approach to the readiness — skill, experience, and willingness — of the people they lead. Effective leadership, under this model, balances task direction and relationship support to match follower maturity….

Heroes Earned Retirement Opportunities (HERO) Act — Overview The HERO Act is a federal law that lets qualifying military personnel use combat pay to fund individual retirement accounts (IRAs). Enacted in 2006 and applied retroactively to January 2004, the law removes a barrier that previously prevented service members whose pay was entirely tax-exempt combat compensation…

Heritage and Stabilization Fund (HSF) What is an HSF? A Heritage and Stabilization Fund (HSF) is a public sovereign fund created to manage and preserve a country’s non-renewable resource revenues (often from oil, gas, or minerals) for long-term prosperity and short-term fiscal stability. It combines two objectives: saving wealth for future generations (heritage) and smoothing…

Herfindahl-Hirschman Index (HHI) Definition The Herfindahl-Hirschman Index (HHI) measures market concentration by quantifying the relative size of firms within an industry. It is commonly used by regulators and economists to assess competitiveness and to evaluate potential antitrust issues in mergers and acquisitions. Formula and calculation HHI is calculated by squaring the market share of each…

Herd Instinct Key takeaways Herd instinct (or herding) is the tendency to follow the actions of a group rather than making independent decisions. In markets, herding can inflate asset prices beyond fundamentals (bubbles) or accelerate sell‑offs (crashes). Common drivers include fear of missing out (FOMO), social proof, and uncertainty. You can reduce herd-driven mistakes by…

Herbert A. Simon Herbert A. Simon was a pioneering scholar whose work reshaped economics, organizational theory, and artificial intelligence (AI). He challenged classical assumptions about perfectly rational decision-making and helped found the field of AI with early programs that modeled human problem solving. Key takeaways Introduced the theory of bounded rationality and the concept of…

What Is Henry Hub? Henry Hub is a natural gas pipeline junction in Erath, Louisiana, that serves as the official delivery point for natural gas futures on the New York Mercantile Exchange (NYMEX). Owned by Sabine Pipe Line LLC, the hub links the U.S. Gulf Coast supply network to major gas markets across the country….

Henry B. Tippie College of Business — Overview and the Iowa Electronic Markets The Henry B. Tippie College of Business at the University of Iowa is home to one of the longest-running and most influential prediction market experiments: the Iowa Electronic Markets (IEM). Operated by Tippie faculty, the IEM has used market-based forecasting since 1988…

Help-Wanted Index (HWI) What it is The Help-Wanted Index (HWI), published by The Conference Board, measures how efficiently employers are matching job openings to the available workforce. It tracks changes in employment demand by counting help-wanted advertising volume and serves as a leading indicator of unemployment and labor-market tightness. History and methodology Introduced in 1951…

Hell or High Water Contract A hell or high water contract (also called a promise-to-pay contract) is a non‑cancelable agreement that obligates one party to make the agreed payments regardless of problems that arise with the goods or services. These clauses shift most performance and default risk to the paying party (lessee or borrower) and…

Helicopter Drop (Helicopter Money): Economics, Examples, and Types A helicopter drop—sometimes called helicopter money—describes a policy that directly injects cash into the public to stimulate spending, inflation, and economic growth. The phrase began as a thought experiment to illustrate the effects of adding money to households, and today it’s used to describe unconventional fiscal and…

Held-to-Maturity (HTM) Securities Held-to-maturity (HTM) securities are debt investments purchased with the intent and ability to hold them until their stated maturity date. Typical HTM instruments include bonds and certificates of deposit (CDs). Because they have fixed payment schedules and a maturity date, they are treated differently in accounting and offer predictable income for investors…

Held Order: What It Means and How It Works Key takeaways * A held order requires the broker to execute immediately—typically a market order—so the trade is filled without delay. * It guarantees execution of the full order size but gives the broker little or no discretion on price or timing. * A not-held order,…

Held‑for‑Trading Security: Definition and Accounting Treatment A held‑for‑trading security is a debt or equity investment acquired with the intent to sell in the short term (typically within one year) to capture short‑term price movements. Because of its short‑term trading purpose, these securities are reported at fair value, and any unrealized gains or losses flow through…

Held-by-Production Clause What it is A held-by-production clause (also called a habendum clause) is a provision in oil, natural gas, or mineral leases that allows the lessee (typically an energy company) to continue operating beyond the lease’s primary term so long as the property is producing a minimum amount of oil, gas, or mineral value….

Heir: Definition, Types, Intestate Succession, and Examples Key takeaways An heir is a person entitled by law to inherit some or all of a deceased person’s estate when there is no valid will (dying intestate). Intestate succession and probate rules—set by state or national law—determine who inherits and in what order. Heirs are typically close…

Heikin-Ashi Technique Key takeaways * Heikin-Ashi is a candlestick smoothing technique that averages price data to highlight trends and reduce market noise. * It produces smoother, more continuous candles than standard candlesticks, making trends and reversals easier to spot. * Averaging removes some raw price information (actual closes and gaps) and makes the chart slower…

Hedonic Regression Method Hedonic regression estimates how different product attributes affect its price or demand. The dependent variable is typically the price (or quantity demanded), and independent variables are the measurable characteristics—size, features, location, quality—that buyers value. Coefficient estimates indicate the implicit price or weight consumers place on each attribute. Key takeaways Hedonic regression decomposes…

Hedonic Pricing Hedonic pricing is a method for estimating how a product’s characteristics — both intrinsic and environmental — contribute to its market price. It is commonly used in real estate to assign monetary values to features such as square footage, number of bedrooms, neighborhood quality, proximity to parks or highways, and environmental factors like…