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is a cpu an asic | no asics are specific to one purpose while a central processing unit is designed to be able to do much more than one or a few tasks | |
what is asic in electronics | asics are printed electronic boards with circuits and processing units which act as a system that carries out specific tasks the bottom lineapplication specific integrated circuit mining machines are built to generate hashes for cryptocurrency mining they are orders of magnitude faster than central and graphics processing units in this respect and have taken over minable cryptocurrency networks | |
what is applied economics | the aim of applied economics is to inform economic decisions and predict possible outcomes applied economics relates the conclusions drawn from economic theories and empirical studies to real world situations the purpose of applied economics is to improve the quality of practice in business public policy and daily life by thinking rigorously about costs versus benefits incentives and human behavior it can involve the use of case studies and econometrics which is the application of real world data to statistical models and comparing the results against the theories being tested understanding applied economicsapplied economics is the application of economic theory to determine the likely outcomes associated with various possible courses of action in the real world by better understanding the likely consequences of choices made by individuals businesses and policymakers we can help them make better choices if economics is the science of studying how people use various limited means available to them to achieve given ends then applied economics is the tool to help choose the best means to reach those ends as a result applied economics can inform a to do list identifying steps that can be taken to increase the probability of positive outcomes in real world events the use of applied economics may first involve exploring economic theories to develop questions about a circumstance or situation and then drawing upon data resources and other frames of reference to form a plausible answer to that question the idea is to establish a hypothetical outcome based on the specific ongoing circumstances drawn from the known implications of general economic laws and models applied economics relevance in financial choicesapplied economics can illustrate the potential outcomes of financial choices made by individuals for example if a consumer desires to own a luxury good but has limited financial resources an assessment of the cost and long term impact such a purchase would have on assets can compare them to the expected benefit of the good this can help determine if such an expense is worthwhile beyond finances understanding the meaning of the economic theories of rational choice game theory or the findings of behavioral economics and evolutionary economics can help a person make better decisions and plan for success in their personal life and relationships for example a person who wants to quit smoking might recognize that they are prone to hyperbolic discounting and might choose to employ precommitment strategies to support their long term preference to quit over more powerful short term preferences to smoke or a group of friends sharing a large bowl of popcorn might explicitly or implicitly agree to limits or shares for how much popcorn each will take in order to avoid a tragedy of the commons situation making better business decisionsapplied economics can also help businesses make better decisions understanding the implications of economic laws of supply and demand combined with past sales data and marketing research regarding their target market can help a business with pricing and production decisions awareness of economic leading indicators and their relationship to a firm s industry and markets can help with operational planning and business strategy understanding economic ideas such as principal agent problems transaction costs and the theory of the firm can help businesses design better compensation schemes contracts and corporate strategies bottom lineapplied economics is an invaluable tool for public policymakers many economists are employed to predict both the macro and microeconomic consequences of various policy proposals or to evaluate the effects of ongoing policy applied macroeconomic modeling is routinely used to project changes in unemployment economic growth and inflation at the national regional and state levels understanding the way the economic incentives and compensating behaviors created by public policy impact real world trends in things like job growth migration and crime rates is critical to implementing effective policy and avoiding unintended consequences for example understanding what the application of the laws of supply and demand implies about the effects of price floors along with case studies and empirical research can inform better policy regarding minimum wage laws | |
what is an appraisal | an appraisal is a valuation of property such as real estate a business collectible or an antique by the estimate of an authorized person the authorized appraiser must have a designation from a regulatory body governing the jurisdiction of the appraiser appraisals are typically used for insurance and taxation purposes or to determine a possible selling price for an item or property understanding appraisalsappraisals are used in many types of transactions including real estate if a home valuation for example comes in below the amount of the purchase price mortgage lenders are likely to decline to fund the deal unless the prospective buyer is willing and able to come up with the difference between the appraised value and the lender s financing offer the transaction will not go forward the appraiser can use any number of valuation methods to determine the appropriate value of an item or property including comparing the current market value of similar properties or objects appraisals are also done for tax purposes when determining the value of charitable donations for itemized deductions deductions can reduce your taxes owed to the irs by deducting the value of your donation from your taxable income 1appraisals can also be a helpful tool in resolving conflicts between heirs to an estate by establishing the value of the real estate or personal property to be divided types of appraisalsa home valuation is necessary during the process of buying and selling a home as well as a refinance of an existing mortgage a refinance is when a loan or mortgage is reevaluated and updated to current interest rates and new terms an appraisal determines the home s value to ensure that the price reflects the home s condition age location and features such as the number of bathrooms also valuations help banks and lenders avoid loaning more money to the borrower than the house is worth in the event of default when the borrower can t make the payments anymore the bank uses the appraisal as a valuation of the home if the home is in foreclosure whereby the bank takes possession of the house it must be resold to help the lender recoup any losses from making the mortgage loan it s important to remember that when a bank lends for a mortgage it gives the full amount of the home s value to the seller on the date it s sold in other words the bank is out the money and in return has a promise to pay plus interest from the borrower as a result the valuation is important to the lending process since it helps the bank avoid losses and protect itself against lending more than it might be able to recover if the borrower defaults a home appraisal is separate from a home inspection which is completed to determine the condition of the home and identify any potentially serious issues before a buyer moves forward with closing professional appraisals can be done for many items including collectibles antiques or grandma s silver ideally you ll want multiple valuations for an item from an accredited professional appraisers might charge an hourly rate or a flat fee a certified appraiser s valuation will likely be fair and unbiased whereas the local collectible shop has an incentive to offer you less for the item also owners can get an idea of an item s value by checking collectible magazines and online appraisal websites most websites charge a small fee such as 10 to value an item of course obtaining a value online is done through photos of the item and is not an official valuation but it should give you an idea of what it s worth before proceeding if you decide to pursue an appraisal the american society of appraisers has thousands of members and is a great place to begin searching for an accredited professional 2some types of insurance policies also require appraisals of goods being insured homeowners and renters insurance policies protect policyholders against the loss of personal property due to theft or damage these blanket policies cover items up to a preset dollar limit obtaining an appraisal of the contents of a home creates an inventory of the owner s property and establishes its value which helps to ensure a swift settlement if a claim is filed | |
when the value of specific items exceeds a homeowners policy limit the policyholder may wish to obtain additional insurance that covers luxury items such as jewelry or collectibles including art objects and antiques before issuing personal property insurance policies for high end items many insurance underwriters require applicants to have the object appraised the appraisal creates a record of the item s existence along with its description it also helps establish the item s actual value | some insurance contracts include an appraisal clause that specifies the owner agrees to obtain an appraisal from a mutually agreeable expert in the event of a dispute between the owner and the insurance company neutral appraisals can speed the resolution of a settlement and keep disputes from escalating into lengthy and expensive lawsuits the actual amount you pay for a home appraisal can depend on where the property is located and how much time is required to complete the appraisal home appraisal process and costthe home appraisal process typically begins after a buyer makes an offer on a home and that offer is accepted by the seller the buyer s mortgage lender or broker may order the appraisal on their behalf though the buyer is typically expected to pay for it out of pocket on average a home appraisal for a single family property runs between 300 and 450 while appraisals for multi family homes can start at around 500 3once the appraisal is ordered the appraiser will schedule a time to visit the property the appraiser will then conduct a thorough review of the interior and exterior of the home to determine what it s worth this may require them to take measurements or photos of the property appraisals can take a few minutes to a few hours to complete depending on the details of the home and the appraiser s methods after visiting the home the appraiser will use the information they ve collected to create a reasonable estimate for the home s value at this stage the appraiser will also look at the values of comparable homes in the area using these comps and what they ve learned from visiting the home the appraiser will prepare an appraisal report that includes a figure that represents their perceived value of the home a copy of this appraisal report is then shared with the buyer and the buyer s mortgage lender it can take anywhere from a week to 10 days for the report to be completed sellers can also request a copy of the report if a buyer disagrees with the appraisal report they can request a reconsideration from the lender or opt to pay for a second appraisal the appraisal process is meant to be objective but appraisers are human good curb appeal and clean uncluttered rooms send a message of a well maintained home and they can be achieved without a great deal of time or expense there are some easy ways to quickly improve the appraised value of your home on the other hand you should avoid big expensive improvements just for the sake of increasing your home s appraisal value they generally don t pay off make sure you know your rights as well if you hire the appraiser to determine your home s value the appraisal belongs to you if you re refinancing your mortgage and the lender hires the appraiser the lender is required to provide you with a copy possibly for a reasonable fee of the appraisal and any other home value estimates 4if you think the appraiser has the value wrong first review the written appraisal for errors check whether the comps the appraiser chose are reasonably similar to your home if you still think the price is incorrect you can appeal the valuation with your lender or ask it to order a second appraisal | |
how much does a home appraisal cost | on average a home appraisal can cost anywhere from 300 to 450 3 the price may be higher for appraisals of multi family homes or properties that are above average in size the buyer is most often responsible for paying appraisal fees at the time the appraisal is ordered | |
is a home appraisal required | a home appraisal is almost always a requirement when purchasing a home with a mortgage lenders use the appraisal to determine whether the home is worth the amount of money the buyer is asking to borrow a buyer may not require an valuation if they re paying cash for a home versus taking out a mortgage loan can the buyer be present during an appraisal both buyers and sellers can ask to be present at the home appraisal with the approval of the appraiser in lieu of attending themselves buyers and sellers can request that their agents be allowed to attend the appraisal but typically only the appraiser is present as it s less common for buyers or sellers to show up | |
what happens if the appraisal comes in too low | if a home appraisal comes in below what the buyer has agreed to pay there are several options they could choose from the first is to ask the seller to renegotiate the home s price so that it aligns with the home s appraisal value the next option is to pay the difference between the appraisal value and the asking price out of pocket buyers could also use a piggyback mortgage to make up the difference between the home s value and its sales price | |
do i need an appraisal to refinance a mortgage | in most cases yes lenders use appraisals to determine a home s value for refinancing mortgages the way they do for purchase mortgages there are a couple of exceptions however in some cases you will not need an valuation if you are taking out an fha refinance loan if it is what is called a streamline refinance loan 5 if you hold a va backed loan you will need an appraisal if you are planning to take out a cash out refinance loan 6due to the covid 19 pandemic there is a partial waiver on appraisals from april 26 2021 to april 26 2022 according to the u s department of housing and urban development 7the bottom linean appraisal is an assessment of the fair market value of a property business antique or even a collectible appraisals are used to estimate the value of items that are infrequently traded and are often rare or unique the authorized appraiser must have a designation from a regulatory body governing the jurisdiction of the appraiser appraisals can be done for many reasons such as tax purposes when valuing charitable donations but the most familiar form of appraisal is for a property home appraisals can positively or negatively impact the sale of a house or property and so are an important part of the process of financing a house a home appraisal is almost always a requirement when purchasing a home with a mortgage for example and if you are refinancing your property your lender may hire their own appraiser to make a valuation of your home | |
what are appraisal costs | appraisal costs are a specific category of quality control costs companies pay appraisal costs as part of the quality control process to ensure that their products and services meet customer expectations and regulatory requirements these costs could include expenses for field tests and inspections understanding appraisal costsappraisal costs can be a key expense for companies seeking to maintain high levels of customer and regulatory satisfaction payments for secret shopper salaries factory floor inspectors and technical screening equipment all fall into this category companies that spend large amounts of money on appraisal costs show that they are concerned with their reputations common appraisal costs include inspecting materials delivered from suppliers materials that are a work in process or finished goods supplies used for inspections and maintenance of test equipment to prevent defective inventory or products from reaching their customers companies get creative while incurring appraisal costs to spot suspect products in the end it is less expensive to incur appraisal costs than to lose customers who are frustrated by the receipt of low quality goods the internet and social media now give consumers unprecedented opportunities to voice their dissatisfaction with any companies or products that fail to meet their standards the threat of unpleasant reviews or viral pr mishaps keeps companies on their toes and investing in appraisals of their products appraisal costs can simply be looked at as part of the cost of doing business as well as the cost of creating a product or service a company s reputation is one of the most important assets that it has once a company s reputation slips into the negative after the release of faulty products and bad publicity it is almost always impossible or extremely difficult to shift consumer opinion it is for this reason that management needs to pay strict attention to quality control to ensure the lasting success of their company appraisal costs are a part of that process examples of appraisal coststhere are many examples of appraisal costs and every industry has different types of appraisals and therefore the costs associated with them appraisal costs can even be driven by where the industry is in a market cycle a classic appraisal cost would be what is spent to inspect materials delivered from suppliers for example let s say a music retailer gets a shipment of guitars from a major manufacturer last year the guitar manufacturer s first round of guitars had faulty tuners causing customers to return opened products file complaints with the guitar store s corporate parent and in some cases switch their loyalty to a different music retailer so this year when the new shipment of guitars comes in the music retailer opens the boxes inspects each guitar to make sure the tuners are in good shape and then repackages them before making them available to customers this process costs money and time which is accounted for on the balance sheet as an appraisal cost other examples of appraisal costs include the next best thing to incurring appraisal costs includes working on increasing the quality of the production processes of all suppliers and the company itself the idea of vendor and supply chain management seeks to improve the entire process so that it s inherently incapable of producing defective parts like a final product suppliers need to ensure that their raw materials are in good condition or else they risk losing supply contracts with the final producer of a good | |
what is an appraisal management company amc | an appraisal management company amc is an independent entity through which mortgage lenders order residential real estate valuation services for properties on which they are considering extending loans to homebuyers amcs fulfill an administrative function in the appraisal process including selecting an appraiser and delivering the appraisal report to the lender individual appraisers who work for amcs provide the actual property valuation services understanding appraisal management companies amc amcs have been a part of the real estate landscape for the past 50 years however their numbers remained limited until the financial crisis of 2007 to 2008 in 2009 the new york attorney general government sponsored enterprises freddie mac and fannie mae and the federal housing finance agency fhfa established the home valuation code of conduct hvcc appraisal guidelines 1 the hvcc guidelines no longer on the books laid the foundation for the appraiser independence found in the dodd frank wall street reform and consumer protection act and the truth in lending act laws obligating lenders to use independent appraisers led to a sharp rise in the use and number of amcs 23the hvcc and later federal regulation sought to limit the amount of direct contact that lenders could have with appraisers essentially the u s federal government created appraiser independence requirements to prevent lenders from influencing appraisers to inflate property values a problem believed to have contributed to the housing crisis with an amc mortgage brokers loan officers nor homeowners may select the appraiser for the property on which they want to lend borrow funds since the former parties have a financial interest in the transaction there is a risk they might attempt to influence the appraiser to assign a higher value to the property than market conditions support so the transaction will go through | |
when the system works correctly the amc chooses an appraiser with local knowledge of the market for the property being appraised | appraisal management company amc requirementsamcs maintain a pool of state licensed or state qualified appraisers to meet requests from lending institutions an appraiser is then assigned to provide an appraisal report for the property amc appraisers are not provided with any prior information regarding the property or put in contact with the lending institution the appraiser s assessment must meet the uniform standards of professional appraisal practice uspap guidelines if there are any issues the amc can legally assist | |
what is appreciation | appreciation in general terms is an increase in the value of an asset over time the increase can occur for a number of reasons including increased demand or weakening supply or as a result of changes in inflation or interest rates this is the opposite of depreciation which is a decrease in value over time | |
how appreciation works | appreciation can be used to refer to an increase in any type of asset such as a stock bond currency or real estate for example the term capital appreciation refers to an increase in the value of financial assets such as stocks which can occur for reasons such as improved financial performance of the company just because the value of an asset appreciates does not necessarily mean its owner realizes the increase if the owner revalues the asset at its higher price on their financial statements this represents a realization of the increase another type of appreciation is currency appreciation the value of a country s currency can appreciate or depreciate over time in relation to other currencies capital gain is the profit achieved by selling an asset that has appreciated in value | |
how to calculate the appreciation rate | the appreciation rate is virtually the same as the compound annual growth rate cagr thus you take the ending value divide by the beginning value then take that result to 1 dividend by the number of holding periods e g years finally you subtract one from the result however in order to calculate the appreciation rate that means you need to know the initial value of the investment and the future value you also need to know how long the asset will appreciate for example rachel buys a home for 100 000 in 2016 in 2021 the value has increased to 125 000 the home has appreciated by 25 125 000 100 000 100 000 during these five years the appreciate rate or cagr is 4 6 125 000 100 000 1 5 1 appreciation vs depreciationappreciation is also used in accounting when referring to an upward adjustment of the value of an asset held on a company s accounting books the most common adjustment on the value of an asset in accounting is usually a downward one known as depreciation certain assets are given to appreciation while other assets tend to depreciate over time as a general rule assets that have a finite useful life depreciate rather than appreciate depreciation is typically done as the asset loses economic value through use such as a piece of machinery being used over its useful life while appreciation of assets in accounting is less frequent assets such as trademarks may see an upward value revision due to increased brand recognition real estate stocks and precious metals represent assets purchased with the expectation that they will be worth more in the future than at the time of purchase by contrast automobiles computers and physical equipment gradually decline in value as they progress through their useful lives example of capital appreciationan investor purchases a stock for 10 and the stock pays an annual dividend of 1 equating to a dividend yield of 10 a year later the stock is trading at 15 per share and the investor has received the dividend of 1 the investor has a return of 5 from capital appreciation as the price of the stock went from the purchase price or cost basis of 10 to a current market value of 15 in percentage terms the stock price increase led to a return from capital appreciation of 50 the dividend income return is 1 equating to a return of 10 in line with the original dividend yield the return from capital appreciation combined with the return from the dividend leads to a total return on the stock of 6 or 60 example of currency appreciationchina s ascension onto the world stage as a major economic power has corresponded with price swings in the exchange rate for its currency the yuan beginning in 1981 the currency rose steadily against the dollar until 1996 when it plateaued at a value of 1 equaling 8 28 yuan until 2005 the dollar remained relatively strong during this period it meant cheaper manufacturing costs and labor for american companies who migrated to the country in droves it also meant that american goods were competitive on the world stage as well as the u s due to their cheap labor and manufacturing costs in 2005 however china s yuan reversed course and appreciated 33 in value against the dollar as of may 2024 it s still near that retraced level trading at 7 2 yuan 1appreciation faqsan appreciating asset is any asset which value is increasing for example appreciating assets can be real estate stocks bonds and currency appreciation rate is another word for growth rate the appreciation rate is the rate at which an asset s value grows a good appreciation rate is relative to the asset and risk involved what might be a good appreciation rate for real estate is different than what is a good appreciation rate for a certain currency given the risk involved capital appreciation is the increase in the value or price of an asset this can include stocks real estate or the like the bottom lineappreciation is the rise in the value of an asset such as currency or real estate it s the opposite of depreciation which reduces the value of an asset over its useful life increases in value can be attributed to interest rate changes supply and demand changes or various other reasons | |
what is an appropriation | appropriation is when money is set aside for a specific purpose a company or a government appropriates funds in order to delegate cash for the necessities of its operations appropriations for the u s federal government are decided by congress through various committees a company might appropriate money for short term or long term needs that include employee salaries research and development and dividends | |
what does an appropriation tell you | appropriations tell us how money or capital is being allocated whether it s through the federal government s budget or a company s use of cash and capital appropriations by governments are made for federal funds each year for various programs appropriations for companies may also be known as capital allocation appropriation could also refer to setting apart land or buildings for public use such as for public buildings or parks appropriation can also refer to when the government claims private property through eminent domain in the united states appropriations bills for the federal government s spending are passed by u s congress the government s fiscal year runs from october 1 through september 30 of each calendar year each fiscal year the u s president submits a budget proposal to congress budget committees in the u s house and senate then determine how the discretionary portion of the budget will be spent through a budget resolution process the process yields an allocation of an amount of money that is assigned to the various appropriations committees the house and senate appropriations committees divide the money up between the various subcommittees that represent the departments that ll receive the money some of the departments include the following federal programs such as social security and medicare fall under the mandatory expenditures category and receive funding through an automatic formula rather than through the appropriations process congress also passes supplemental appropriations bills for instances when special funding is needed for natural disasters and other emergencies for example in december 2014 congress approved the consolidated and further continuing appropriations act 2015 the act approved 5 2 billion to fight the ebola virus in west africa and for domestic emergency responses to the disease the act also allocated funding for controlling the virus and developing treatments for the disease corporate appropriations refer to how a company allocates its funds and can include share buybacks dividends paying down debt and purchases of fixed assets fixed assets are property plant and equipment in short how a company allocates capital spending is important to investors and the long term growth prospects of the company | |
how a company appropriates money or invests its cash is monitored closely by market participants investors watch to determine whether a company is using its cash effectively to build shareholder value or whether the company is engaged in frivolous use of its cash which can lead to the destruction of shareholder value | monitoring corporate appropriationsinvestors monitor corporate appropriations of cash by analyzing a company s cash flow statement the cash flow statement cfs measures how well a company manages its cash position meaning how well the company generates cash to pay its debt obligations and fund its operating expenses the cash flow of a company is divided into three activities or behavior example of company appropriationsbelow is the cash flow statement for exxon mobil corporation xom from sept 30 2018 as reported in its 10q filing the cash flow statement shows how the executive management of exxon appropriated the company s cash and profits whether exxon s use of cash is effective or not is up to investors and analysts to debate since evaluating the process of appropriating cash is highly subjective some investors might want more money allocated to dividends while other investors might want exxon to allocate money towards investing in the future of the company by purchasing and upgrading equipment appropriations vs appropriated retained earningsappropriated retained earnings are retained earnings re that are specified by the board of directors for a particular use retained earnings are the amount of profit left over after a company has paid out dividends retained earnings accumulate over time similar to a savings account whereby the funds are used at a later date appropriated retained earnings can be used for many purposes including acquisitions debt reduction stock buybacks and r d there may be more than one appropriated retained earnings accounts simultaneously typically appropriated retained earnings are used only to indicate to outsiders the intention of management to use the funds for some purpose appropriation is the use of cash by a company showing how money is allocated and appropriated retained earnings outlines the specific use of that cash by the board of directors limitations of an appropriationfor investors the cash flow statement reflects a company s financial health since typically the more cash that s available for business operations the better however there are limitations to analyzing how money is spent an investor won t know if the purchase of a fixed asset for example is a good decision until the company begins to generate revenue from the asset as a result the investor can only infer whether the management is effectively deploying or appropriating its funds properly sometimes a negative cash flow results from a company s growth strategy in the form of expanding its operations by studying how a company allocates its spending and uses its cash an investor can get a clear picture of how much cash a company generates and gain a solid understanding of the financial well being of a company | |
what is an appropriation account | appropriation is the act of setting aside money for a specific purpose in accounting it refers to a breakdown of how a firm s profits are divided up or for the government an account that shows the funds a government department has been credited with a company or a government appropriates funds in order to delegate cash for the necessities of its business operations | |
how appropriation accounts work | in general accounting appropriation accounts are mainly prepared by partnerships and limited liability companies llcs they are an extension of the profit and loss statement showing how the profits of a firm are allocated to shareholders or to increase reserves indicated in the balance sheet a company might appropriate money for short term or long term needs to finance things such as employee salaries research and development and dividends for a partnership the primary purpose of the appropriation account is to show how profits are distributed among the partners for an llc the appropriation account will start with profits before taxes and then subtract corporate taxes and dividends to arrive at retained profits government appropriation accounts come into play when they create their budgets appropriation credits are taken out of estimated revenues from taxes and trade and allocated to the proper agencies credits in appropriation accounts that are unused may be redistributed to other agencies or used for other purposes appropriations for the u s federal government are decided by congress through various committees the u s government s fiscal year runs from october 1 through september 30 of each calendar year real world example of appropriation accountsinvestors can monitor appropriations of publicly listed corporations by analyzing their cash flow statements cfs the cfs shows if a firm is generating enough cash to pay its debt obligations and fund its operating expenses here s a breakdown of how tobacco giant altria group inc mo a popular income stock appropriated its cash and profits in the nine months to sep 30 2018 | |
what is an aptitude test | an aptitude test is an exam used to determine an individual s skill or propensity to succeed in a given activity aptitude tests assume that individuals have inherent strengths and weaknesses and a natural inclination toward success or failure in certain areas as a result aptitude tests are widely used in schools by employers and to help individuals make career decisions understanding aptitude testsaptitude tests can be used to determine your capabilities in a variety of subjects for example individuals may take an aptitude test to determine the careers that are a good match for their skills and interests similarly high school students may take an aptitude test when thinking about what would be an appropriate college major or whether college is the best choice for them in general aptitude tests measure one s competence in logical reasoning numerical skills or verbal ability competency can be evaluated through problem solving tasks and testing one s critical thinking across various contexts | |
when you might take an aptitude test | some schools administer aptitude tests to students beginning in the elementary years combined with intelligence and achievement tests that measure student mastery of academic content aptitude tests may be used to determine placement in gifted and talented programs or other specific educational tracks the modern language aptitude test mlat for example can measure an elementary school student s potential for successfully mastering a foreign language aptitude tests of that nature can also help determine if a student needs special education services 1for older students differential aptitude tests dats assess a range of aptitudes from spatial relations to language usage the results can help school administrators make curricular recommendations in keeping with the student s abilities 2aptitude and personality tests can be useful in determining skills and abilities to highlight on a resume or cover letter when applying for a job counselors might use high scores in mechanical reasoning tests to guide students toward courses that prepare them for engineering or designing studies in college for instance students who score well in tests measuring speed accuracy and problem solving might choose coursework in computer science finance or other fields requiring attention to detail some companies use aptitude tests to help them make hiring decisions these tests called career assessment tests help human resources hr personnel learn more about a prospective employee s strengths and weaknesses career assessment tests may also be used within a company to make promotion decisions situational judgment tests are a specific kind of career aptitude test that can help predict how an employee might respond to specific situations in the workplace they are also used to assess an employee s communication style and ability to work within a team3 some situational judgment tests focus specifically on customer service careers these tests analyze personality traits predictive of successful public interaction such as empathy diplomacy and patience situational judgment tests may also be used to predict future competency in sales related careers types of aptitude testsmany types of aptitude tests are administered for educational or career discovery and ability purposes the most common aptitude tests are if you re unsure about what kind of job you want or where you want to go next in your career an aptitude or assessment test offered on various websites either for free or for a small fee can often be helpful | |
how to pass an aptitude test | you might have heard that you can t prepare for an aptitude test but nothing could be further from the truth study guides and practice aptitude tests are readily available online and in community or high school libraries conduct an online search for the type of test you ll be taking you ll find many guides that offer tips on subjects you can read about and practice tests once you ve found the practice tests and some study material | |
what is an aptitude test and an example | an aptitude test measures your capabilities in specific areas one widely used aptitude test is the armed forces vocational aptitude battery asvab the asvab tests general science arithmetic reasoning and mathematics word knowledge reading comprehension mechanical comprehension and more it is given to more than 1 million military applicants and others of high school age and older each year 4 | |
is an iq test an aptitude test | an iq test tries to measure your intelligence while an aptitude test measures your ability to apply your intelligence | |
is there an online aptitude test | while some aptitude tests may still be given using printed test booklets and bubble sheets many are administered online you can find free and paid versions the bottom linean aptitude test is a measure of your ability to learn or perform required tasks and succeed in a particular environment it is not a measure of intelligence but an assessment of your strengths and weaknesses giving you and the evaluator an idea of your abilities most aptitude tests can suggest the likelihood of success in education and a career but they are not always 100 accurate predictions for example it is possible to score very low on an aptitude test for a specific job and be successful with hard work and dedication the test may have merely taken a snapshot of your knowledge and abilities at a point where you didn t know much about the field remember that preparation can help you pass an aptitude test even if you have no prior knowledge in an area if you think of it as learning something new and interesting you may surprise yourself with what you can do | |
what is the arab league | the arab league is a union of arabic speaking african and asian countries it was formed in cairo in 1945 to promote the independence sovereignty affairs and interests of its member countries and observers the organization began with seven founding members and is now comprised of 22 nations and four observer states the league is bound by a charter and has a council in place to ensure that its goals are met understanding the arab leagueas noted above the arab league is an organization that is made up of 22 different nations across the middle east and northern africa many of these countries are part of the middle east north africa mena region it was founded in 1945 and is headquartered in cairo known officially as the league of arab states it focuses on the economic and political development of its member states along with conflict resolution the members of the league and the years they were admitted include denotes a founding member statethere are four nations that were conferred observer status by the league brazil eritrea india and venezuela 1the arab league countries have widely varying levels of population wealth gross domestic product gdp and literacy they are all predominantly muslim arabic speaking countries but egypt and saudi arabia are considered the dominant players in the league through agreements for joint defense economic cooperation and free trade among others the league helps its member countries to coordinate government and cultural programs to facilitate cooperation and limit conflict | |
when jordan joined the arab league its official name was transjordan | history of the arab leaguethe league was formed in 1945 after the seven founding members signed the alexandria protocol in cairo the previous year 2 the prominent issue at the time was freeing the arab countries that were still under colonial rule cairo was the original headquarters for the league in 1945 that changed in 1979 when it was moved to tunis tunisia the organization revoked egypt s membership after it signed a peace treaty with israel the league reestablished ties with egypt in 1987 and moved its headquarters back to cairo when it was admitted back as a member state in 1989 3the arab league acted decisively and unanimously during the arab spring uprisings in early 2011 by revoking the country s membership that same year it supported united nations un action against then leader muammar gaddafi s forces libya s membership was reinstated later that year after a representative of the national transitional council was installed following gaddafi s removal from office to act as the interim government 3the arab league condemned the islamic state in 2014 and several of its members launched airstrikes against the militant organization 4 in 2011 league passed a resolution to revoke syria s membership due to the government s use of force against civilians though it was later reinstated in 2018 and 2019 the organization called on turkey to withdraw from syria in april 2021 the league called on somalia to hold postponed presidential and parliamentary elections 5one of the original goals of the arab league was to prevent the breakup of palestine via the creation of the jewish state of israel as the organization recognizes palestine as a separate nation the league s position on israel since has been inconsistent in 2019 it denounced israel s plans to annex the jordan valley in february 2020 the league denounced the middle east peace plan put forth by president donald trump s administration saying it does not meet the minimum rights and aspirations of palestinian people 4 however several members seemed to approve of the plan and in september 2020 the league didn t condemn the decision by the united arab emirates to normalize ties with the jewish state one of the arab league s longest lasting and unanimous actions its members economic boycott of israel between 1948 and 1993 6the arab league charterthe charter of the arab league was established on march 22 1945 and is referred to as the pact of the league of arab states it was signed by the leaders of the seven founding member states egypt iraq jordan lebanon saudi arabia syria and yemen as per the agreement the member states aim to strengthen their ties and reinforce their sovereignty 47the pact is composed of 20 articles that outline the goals governance headquarters and the creation of the arab league council it also features what actions must be taken to resolve disputes among members 7there are also annexes on the following issues the arab league councilthe league council is the highest body of the arab league and is composed of representatives of member states typically foreign ministers their representatives or permanent delegates each member state has one vote the council meets twice a year in march and september two or more members may request a special session if they desire the general secretariat manages the daily operations of the league and is headed by the secretary general the general secretariat is the administrative body of the league the executive body of the council and the specialized ministerial councils arab league member conflictsthe arab league s effectiveness and influence have been hampered by divisions among member states during the cold war some members were supportive of the soviet union while others aligned with western nations there has also been rivalry over league leadership especially between egypt and iraq hostilities between monarchies such as saudi arabia jordan and morocco have been disruptive as have the conduct of states that have undergone political change such as egypt under gamal abdel nasser and libya under muammar gaddafi the attack on saddam hussein s iraq by the united states also created significant rifts between members of the arab league resolutions by the council don t have to be unanimously approved by members however because they are binding only on the nations that voted for them no country has to abide by them against its will their effectiveness is somewhat limited often amounting to little more than declarations rather than implemented policies | |
what is the purpose of the arab league | the arab league s state purpose is to seek close cooperation among its members on matters of common interest specifically economics communication culture nationality social welfare and health to strengthen ties improve communication and promote common interest among arabic speaking nations the pact of the league of arab states the organization s founding document identifies the mission of the league as follows the purpose of the league is to draw closer the relations between member states and coordinate their political activities with the aim of realizing a close collaboration between them to safeguard their independence and sovereignty and to consider in a general way the affairs and interests of the arab countries 8who is the leader of the arab league the arab league is headed by the secretary general as of march 2024 ahmed aboul gheit holds that post he assumed it in 2016 9 | |
does the arab league still exist | yes the arab league still exists but members are skipping league summits and declining positions possibly a sign of waning enthusiasm for the organization some scholars and statesmen feel that the league is unable to overcome a fundamental paralysis due to internal divisions among its member nations leading to resolutions that are prefabricated out of date out of touch and reflexively anti israeli as states a 2020 article posted by the begin sadat center for strategic studies the conclusion of the begin sadat center for strategic studies is that the time has come to close it down 10 the league s paralysis reflects its irrelevance since the 2000s sean yom associate professor at temple university philadelphia and author of from resilience to revolution how foreign interventions destabilize the middle east said in a 2018 interview if we are going to see the league simply dissolve away it will probably take another decade or two 11 | |
why is turkey not in the arab league | turkey has expressed interest in having an observer status in the league but has been refused for several reasons those include opposition from iraq whose kurdish citizens turkey has frequently battled with and from syria which still claims turkey s hatay province the league has also condemned turkey s military interventions in libya and other countries | |
is the arab league a military alliance | the arab league is not a military alliance per se but its founding members agreed to cooperate in military affairs and coordinate military defense 4 at the 2007 summit the leaders of its member states decided to reactivate their joint defense and establish a peacekeeping force to deploy in south lebanon darfur iraq and other hot spots at a 2015 summit in egypt member states agreed to form a joint voluntary military force in principle 12the bottom linethere are many different intergovernmental organizations found around the world some of these are global such as the united nations while others are focused more on certain regions like the arab league this group is composed of 22 member nations that span the middle east and northern africa like other similar groups the arab league s goals are to strengthen the relationships between member states while promoting their political and economic development | |
what is arbitrage | arbitrage is the simultaneous purchase and sale of the same or similar asset in different markets in order to profit from tiny differences in the asset s listed price it exploits short lived variations in the price of identical or similar financial instruments in different markets or in different forms arbitrage exists as a result of market inefficiencies and it both exploits those inefficiencies and resolves them understanding arbitragearbitrage can be used with any asset type but occurs most commonly in liquid markets such as commodity futures well known stocks or major forex pairs these assets can often be transacted in multiple markets at once this creates rare opportunities for purchasing in one market at a given price and simultaneously selling in another market at a higher price in principle the situation creates an opportunity for a risk free profit for the trader however in today s modern markets these circumstances could indicate a hidden cost not immediately apparent to the arbitrageur arbitrage provides a mechanism to ensure that prices do not deviate substantially from fair value for long periods of time with advancements in technology it has become extremely difficult to profit from pricing errors in the market many traders have computerized trading systems set to monitor fluctuations in similar financial instruments any inefficient pricing setups are usually acted upon quickly and the opportunity is eliminated often in a matter of seconds examples of arbitrageas a straightforward example of arbitrage consider the following the stock of company x is trading at 20 on the new york stock exchange nyse while at the same moment it is trading for 20 05 on the london stock exchange lse a trader can buy the stock on the nyse and immediately sell the same shares on the lse earning a profit of 5 cents per share the trader can continue to exploit this arbitrage until the specialists on the nyse run out of inventory of company x s stock or until the specialists on the nyse or the lse adjust their prices to wipe out the opportunity types of arbitrage include risk retail convertible negative statistical and triangular among others a trickier example can be found in forex or currency markets using triangular arbitrage in this case the trader converts one currency to another converts that second currency to a third bank and finally converts the third currency back to the original currency suppose you have 1 million and you are provided with the following exchange rates usd eur 1 1586 eur gbp 1 4600 and usd gbp 1 6939 with these exchange rates there is an arbitrage opportunity from these transactions you would receive an arbitrage profit of 1 384 assuming no transaction costs or taxes | |
how does arbitrage work | arbitrage is trading that exploits the tiny differences in price between identical or similar assets in two or more markets the arbitrage trader buys the asset in one market and sells it in the other market at the same time to pocket the difference between the two prices there are more complicated variations in this scenario but all depend on identifying market inefficiencies arbitrageurs as arbitrage traders are called usually work on behalf of large financial institutions it usually involves trading a substantial amount of money and the split second opportunities it offers can be identified and acted upon only with highly sophisticated software | |
what are some examples of arbitrage | the standard definition of arbitrage involves buying and selling shares of stock commodities or currencies on multiple markets to profit from inevitable differences in their prices from minute to minute however the term arbitrage is also sometimes used to describe other trading activities merger arbitrage which involves buying shares in companies prior to an announced or expected merger is one strategy that is popular among hedge fund investors | |
why is arbitrage important | in the course of making a profit arbitrage traders enhance the efficiency of the financial markets as they buy and sell the price differences between identical or similar assets narrow the lower priced assets are bid up while the higher priced assets are sold off in this manner arbitrage resolves inefficiencies in the market s pricing and adds liquidity to the market the bottom linearbitrage is a condition where you can simultaneously buy and sell the same or similar product or asset at different prices resulting in a risk free profit economic theory states that arbitrage should not be able to occur because if markets are efficient there would be no such opportunities to profit however in reality markets can be inefficient and arbitrage can happen when arbitrageurs identify and then correct such mispricings by buying them low and selling them high though they work to move prices back in line with market efficiency this means that any arbitrage opportunities that do occur are short lived there are many different arbitrage strategies that exist some involving complex interrelationships between different assets or securities correction april 9 2022 a previous version of this article had miscalculated the complicated arbitrage example | |
what is the arbitrage pricing theory apt | arbitrage pricing theory apt is a multi factor asset pricing model it s based on the idea that an asset s returns can be predicted using the linear relationship between the asset s expected return and a number of macroeconomic variables that capture systematic risk it is a useful tool for analyzing portfolios from a value investing perspective in order to identify securities that may be temporarily mispriced the formula for the arbitrage pricing theory model ise r i e r z e i e r z nwhere e r i expected return on the assetrz risk free rate of return n sensitivity of the asset price to macroeconomicfactor nei risk premium associated with factor i begin aligned text e r text i e r z e i e r z times beta n textbf where text e r text i text expected return on the asset r z text risk free rate of return beta n text sensitivity of the asset price to macroeconomic text factor textit n ei text risk premium associated with factor textit i end aligned e r i e r z e i e r z n where e r i expected return on the assetrz risk free rate of return n sensitivity of the asset price to macroeconomicfactor nei risk premium associated with factor i the beta coefficients in the apt model are estimated by using linear regression in general historical securities returns are regressed on the factor to estimate its beta | |
how the arbitrage pricing theory works | the arbitrage pricing theory was developed by the economist stephen ross in 1976 as an alternative to the capital asset pricing model capm 1 unlike the capm which assume markets are perfectly efficient apt assumes markets sometimes misprice securities before the market eventually corrects and securities move back to fair value using apt arbitrageurs hope to take advantage of any deviations from fair market value however this is not a risk free operation in the classic sense of arbitrage because investors are assuming that the model is correct and making directional trades rather than locking in risk free profits mathematical model for the aptwhile apt is more flexible than the capm it is more complex the capm only takes into account one factor market risk while the apt formula has multiple factors and it takes a considerable amount of research to determine how sensitive a security is to various macroeconomic risks the factors as well as how many of them are used are subjective choices which means investors will have varying results depending on their choice however four or five factors will usually explain most of a security s return for more on the differences between the capm and apt read more about how capm and arbitrage pricing theory differ apt factors are the systematic risk that cannot be reduced by the diversification of an investment portfolio the macroeconomic factors that have proven most reliable as price predictors include unexpected changes in inflation gross national product gnp corporate bond spreads and shifts in the yield curve other commonly used factors are gross domestic product gdp commodities prices market indices and exchange rates example of how arbitrage pricing theory is usedfor example the following four factors have been identified as explaining a stock s return and its sensitivity to each factor and the risk premium associated with each factor have been calculated using the apt formula the expected return is calculated as | |
what is the difference between capm and arbitrage pricing theory | the main difference is that while capm is a single factor model the apt is a multi factor model in the capm the only factor considered to explain the changes in the security prices and returns is the market risk in the apt on the other hand the factors can be several | |
what are the limitations of apt | the main limitation of apt is that the theory does not suggest factors for a particular stock or asset one stock could be more sensitive to one factor than another and investors have to be able to perceive the risk sources and sensitivities | |
what is the main advantage of apt | the main advantage of apt is that it allows investors to customize their research since it provides more data and it can suggest multiple sources of asset risks the bottom linearbitrage pricing theory apt is a multi factor asset pricing model based on the idea that an asset s returns can be forecasted with the linear relationship between an asset s return and a number of macroeconomic factors that affect the asset s risk arbitrage pricing theory assumes that markets sometimes misprice securities before they are corrected and move back to fair value | |
what do arbitrageurs do | there is often confusion about this part of the finance world for example many might know that arbitrageurs seek price differences between stocks listed on more than one exchange by buying the undervalued shares on one exchange while short selling the same number of overvalued shares on another this allows them one might think to capture supposedly risk free profits as the prices on the two exchanges converge but this part of finance has many risks thus the following is worth highlighting while true of some trades the arbitrageur s trade is far from risk free many arbitrageurs work on merger arbitrage which has risks all along the way 12another fundamental misunderstanding concerns practices that have long been illegal and would land an arbitrageur in legal jeopardy if not with stiff fines or a prison sentence historically in risk or merger arbitrage arbitrageurs would go after insider information to get ahead of announcements of mergers and acquisitions they might have contacts in law offices investment banks and accounting firms or call into major companies likely to expand the point was to get critical information often at a price that the arbitrageur could trade on ahead of any public announcement in the 1980s several insider trading cases including those of the arbitrageur ivan boesky led to the insider trading act of 1988 which stiffened penalties and called for stepped up insider trading enforcement by the securities and exchange commission sec 3 in 2000 the sec introduced regulation fd the initials are for full disclosure which further curtailed the information arbitrageurs could get their hands on 4 any material information must be disclosed widely and publicly rather than shared privately with a select few this leads us to another aspect of the work of the arbitrageur to emphasize despite the view that the job of an arbitrageur ends when a merger or acquisition is announced and they cash out after the relevant stock rises this is usually when the work of the modern arbitrageur begins 5 | |
what then does an arbitrageur do let s first look at merger arbitrage which has been behind the plots of several hollywood movies over the years | also known as risk arbitrage merger arbitrage involves capitalizing on the price difference between the stock price of a target company and the offer price from an acquiring company when mergers are announced the target company s stock price usually trades for less than the offer price reflecting uncertainty or risk factors related to the deal arbitrageurs will often strike at this point thinking that the merger is likely to be approved and the target company s stock price will eventually converge with the offer price they take advantage of this price gap by buying the target company s stock at the lower market price and then selling it at the higher offer price when the deal is closed 6once a merger or acquisition is announced arbitrageurs track down detailed information about the transaction they are somewhere between financial researchers and investigative reporters if they only reported to one firm the arbitrageur is sorting out whether the deal will go through their initial step often includes obtaining the annual and quarterly reports and 10 k filings of the involved companies to assess their financial health the better the financial health of the firms the more likely the deal is to be completed arbitrageurs compile research from brokerage firms about both companies and their industries online databases and services have significantly streamlined this process they also want to understand the industry and the rationale behind the deal a strategically sound merger is not only a valuable addition to a portfolio but also more likely to close notable arbitrage opportunities were created by at t time warner announced 2016 closed 2018 and disney fox mergers announced 2017 closed 2019 both mergers faced legal challenges and regulatory scrutiny because of concerns about media consolidation those delays meant that arbitrageurs were following each step a court case here a regulatory ruling there as they calculated and recalculated the likelihood these deals would get done often arbitrageurs are financial generalists so they must be a quick study as they might spend one day on a deal for two manufacturing firms and the next on natural gas companies with complicated details about proven reserves and pipelines near the black sea 5 at each turn arbitrageurs are trying to figure out the potential return for their firm the risk and the likelihood that the deal will be completed only then can the arbitrageur determine what stocks to buy and what strategies are needed to hedge if the deal goes south here s what could go wrong in the time between when a deal is announced and when it s closed 1looking out for these risks makes merger arbitrage an ongoing process arbitrageurs may be in the courtrooms of delaware where most u s companies are domiciled following the ups and downs of cases there alternatively they might be keeping a close eye on global economic indicators and regulatory changes that could affect the success of a deal arbitrageurs are also constantly calling industry experts legal advisors and other arbitrageurs to stay updated on any developments market trends and changes in investor sentiment that mean they need to alter their strategies 6arbitrage for cross market price differenceshere are some ways that arbitrageurs try to profit from the price differences that can appear across different markets | |
when an asset is tradable in several markets prices for that asset may not always be the same | examples of arbitrageur playslet s look at an example of the work of an arbitrageur suppose the stock of company x is trading at 20 on the new york stock exchange nyse while at the same time it is trading for the equivalent of 20 05 on the london stock exchange lse a trader can buy the stock on the nyse and immediately sell the same shares on the lse earning a total profit of 5 cents per share less any trading costs the trader exploits the arbitrage opportunity until the specialists on the nyse run out of inventory of company x s stock or until the nyse or lse adjust their prices to wipe out the opportunity the rise of cryptocurrencies offered another opportunity for arbitrageurs as the price of bitcoin reached records several opportunities to exploit price discrepancies between multiple exchanges around the world presented themselves for example bitcoin traded at a premium at cryptocurrency exchanges in south korea compared with those in the u s the price difference also known as the kimchi premium was mainly because of the high demand for crypto in these regions crypto traders profited by arbitraging the price difference between the two locations in real time 9the impact of arbitragearbitrageurs have a role in the smooth functioning of the capital markets as their efforts in exploiting price inefficiencies keep prices more accurate than they otherwise would be when arbitrageurs buy an asset in cheaper markets and sell the same asset in more expensive markets their actions generally lead to the same price being offered in both this results in equal prices across all markets in short arbitrageurs help resolve inefficiencies in pricing and add liquidity to the market | |
what technologies do arbitrageurs use | arbitrageurs often use specialized trading software designed for algorithmic trading this software can process real time market data analyze that data and execute trades very quickly after doing so also many arbitrageurs use custom built systems tailored to their specific trading strategies these systems often have powerful processors and high speed internet connections to minimize trade execution time cloud computing and data analytics are crucial since traders often need to store process and analyze large datasets when looking for arbitrage prospects across global markets 6 | |
how do arbitrageurs mitigate risk | arbitrageurs face the risk that the expected price convergence between the two assets won t come about or will take longer than expected potentially leading to losses there s also execution risk where delays or failures in executing trades can erode profit margins in addition arbitrageurs face the liquidity risk of not quickly buying or selling assets at the expected prices because of thin trading volumes to mitigate these perils arbitrageurs often spread their investments across different arbitrage opportunities to avoid heavy losses in any area they also use sophisticated risk management tools and techniques including real time monitoring systems and stop loss orders to limit potential losses many arbitrageurs engage in hedging strategies to offset potential losses from market movements 1 | |
what role does high frequency trading hft play in arbitrage | hft has a large role in modern arbitrage strategies hft involves the use of sophisticated algorithms to execute a large number of orders at extremely high speeds for arbitrage hft allows traders to capitalize on fleeting price discrepancies that may exist only for fractions of a second across different exchanges or between different securities these algorithms can analyze market conditions execute orders and then exit those positions within the blink of an eye often before the market has had the chance to correct these inefficiencies 6the bottom linearbitrageurs scour the market for inefficiencies and profit from them these inefficiencies generally relate to the same asset being priced differently on different exchanges however it can also mean researching deeply into market moves like mergers and acquisitions to make gains from price differences in those deals arbitrageurs generally work for large financial firms with vast resources and their work can boost liquidity and make pricing more equal across markets | |
what is arbitration | arbitration is a mechanism for resolving disputes between investors and brokers or between brokers it is overseen by the financial industry regulatory authority finra and the decisions are final and binding arbitration is distinct from mediation in which parties negotiate to reach a voluntary settlement and decisions are not binding unless all parties agree to them arbitration is not the same as filing an investor complaint in which an investor alleges wrongdoing on the part of a broker but has no specific dispute with that broker for which the investor seeks damages | |
how arbitration works | in practical terms arbitration is similar to a lawsuit but may be preferable for all parties due to the lower costs and time commitments involved | |
when an investor or broker has a specific dispute with a broker that is registered with finra they may file a claim with finra that states the alleged misconduct and the amount of money they are seeking in damages | finra will appoint a panel of three financial industry professionals who unless the injured party requests otherwise will not be employed in the securities industry this is intended to eliminate bias but if one of the parties suspects that a member of the panel is biased they may request a change arbitration hearingsfor disputes involving less than 50 000 in person hearings are not considered necessary rather both parties submit written materials to a single arbitrator who decides the case for disputes ranging from 50 000 to 100 000 in person hearings with a single arbitrator are the most common for disputes over 100 000 in person hearings with three arbitrators are standard a majority of the three arbitrator panel that is two people is necessary for a decision arbitrators are not required to explain their decision parties filing for arbitration may represent themselves or they may hire an attorney in general arbitration panels are less formalistic than the court system so investors have a reasonable chance of being successful even when representing themselves there are fees associated with filing for arbitration not to mention the time and travel expenses involved which investors should consider when pursuing this option special considerationsarbitration panels do not necessarily award the full amount sought in a dispute for example if an investor files a claim against his or her broker for 38 000 the panel may decide in the investor s favor but only award 10 000 arbitration decisions are binding and not subject to appeal except under very limited circumstances finra s mediation process on the other hand is not binding unless both parties agree to the settlement the public investors arbitration bar association has criticized finra for lack of diversity on its arbitration panels and lax safeguards against bias and conflicts of interest the regulator has argued that these criticisms are misplaced particularly the focus on arbitrators age in their terms of service most brokers require investors to agree to mandatory arbitration to settle potential disputes rather than going to court since finra has a near monopoly on arbitration the organization s panels are many investors only recourse | |
what is arc elasticity | arc elasticity is the elasticity of one variable with respect to another between two given points it is used when there is no general way to define the relationship between the two variables arc elasticity is also defined as the elasticity between two points on a curve the concept is used in both economics and mathematics in economics is it commonly used to measure the changes between the quantity of goods demanded and their prices understanding arc elasticityin economics arc elasticity is commonly used in relation to the law of demand to measure percentage changes between the quantity of goods demanded and prices 12there are two possible ways of calculating elasticity price or point elasticity of demand and arc elasticity of demand price elasticity of demand measures the responsiveness of quantity demanded to a price it takes the elasticity of demand at a particular point on the demand curve or between two points on the curve arc elasticity of demand uses a midpoint between the two points formula for price point elasticity of demand p e d change in qty change in price pe d dfrac text change in qty text change in price ped change in price change in qty | |
how to calculate the price elasticity of demand | if the price of a product decreases from 10 to 8 leading to an increase in quantity demanded from 40 to 60 units then the price elasticity of demand can be calculated as 2since we re concerned with the absolute values in price elasticity the negative sign is ignored you can conclude that the price elasticity of this good when the price decreases from 10 to 8 is 2 5 arc elasticity of demandone of the problems with the price elasticity of demand formula is that it gives different values depending on whether price rises or falls 2 if you were to use different start and end points in our example above that is if you assume the price increased from 8 to 10 and the quantity demanded decreased from 60 to 40 the ped will be | |
how to calculate the arc elasticity of demand | to eliminate this problem the arc elasticity of demand can be used arc elasticity of demand measures elasticity at the midpoint between two selected points on the demand curve by using a midpoint between the two points the arc elasticity of demand can be calculated as 2let s calculate the arc elasticity following the example presented above | |
when you use arc elasticity of demand you do not need to worry about which point is the starting point and which point is the ending point since the arc elasticity gives the same value for elasticity whether prices rise or fall 2 | arc elasticity of demand is more useful than price elasticity of demand when there is a considerable change in price 2 | |
what is elasticity in economics | in the context of economics elasticity is used to measure the change in the quantity demanded for a product in relation to its price movements a product is considered to be elastic if the demand for it changes substantially when its price changes | |
what is the law of demand | the law of demand is a fundamental economic concept it states that when prices rise the demand for a good or service will decrease | |
what are the benefits of arc elasticity of demand | the formula for arc elasticity of demand measures elasticity between two selected points by using a midpoint between the two points as a result it is particularly useful when there is a substantial change in price the bottom linearc elasticity is commonly used in economics to determine the percentage of change between the demand for goods and their price elasticity can be calculated in two ways price elasticity of demand and arc elasticity of demand the latter is more useful when there is a significant change in price | |
what is the arithmetic mean | the arithmetic mean is the simplest and most widely used measure of a mean or average it simply involves taking the sum of a group of numbers then dividing that sum by the count of the numbers used in the series for example take the numbers 34 44 56 and 78 the sum is 212 the arithmetic mean is 212 divided by four or 53 people also use several other types of means such as the geometric mean and harmonic mean which comes into play in certain situations in finance and investing another example is the trimmed mean used when calculating economic data such as the consumer price index cpi and personal consumption expenditures pce investopedia jiaqi zhou | |
how the arithmetic mean works | the arithmetic mean maintains its place in finance as well for example mean earnings estimates typically are an arithmetic mean say you want to know the average earnings expectation of the 16 analysts covering a particular stock simply add up all the estimates and divide by 16 to get the arithmetic mean the same is true if you want to calculate a stock s average closing price during a particular month say there are 23 trading days in the month simply take all the prices add them up and divide by 23 to get the arithmetic mean the arithmetic mean is simple and most people with even a little bit of finance and math skill can calculate it it s also a useful measure of central tendency as it tends to provide useful results even with large groupings of numbers limitations of the arithmetic meanthe arithmetic mean isn t always ideal especially when a single outlier can skew the mean by a large amount let s say you want to estimate the allowance of a group of 10 kids nine of them get an allowance between 10 and 12 a week the tenth kid gets an allowance of 60 that one outlier is going to result in an arithmetic mean of 16 this is not very representative of the group in this particular case the median allowance of 10 might be a better measure the arithmetic mean also isn t great when calculating the performance of investment portfolios especially when it involves compounding or the reinvestment of dividends and earnings it is also generally not used to calculate present and future cash flows which analysts use in making their estimates doing so is almost sure to lead to misleading numbers the arithmetic mean can be misleading when there are outliers or when looking at historical returns the geometric mean is most appropriate for series that exhibit serial correlation this is especially true for investment portfolios arithmetic vs geometric meanfor these applications analysts tend to use the geometric mean which is calculated differently the geometric mean is most appropriate for series that exhibit serial correlation this is especially true for investment portfolios most returns in finance are correlated including yields on bonds stock returns and market risk premiums the longer the time horizon the more critical compounding and the use of the geometric mean becomes for volatile numbers the geometric average provides a far more accurate measurement of the true return by taking into account year over year compounding the geometric mean takes the product of all numbers in the series and raises it to the inverse of the length of the series it s more laborious by hand but easy to calculate in microsoft excel using the geomean function the geometric mean differs from the arithmetic average or arithmetic mean in how it s calculated because it takes into account the compounding that occurs from period to period because of this investors usually consider the geometric mean a more accurate measure of returns than the arithmetic mean example of the arithmetic vs geometric meanlet s say that a stock s returns over the last five years are 20 6 10 1 and 6 the arithmetic mean would simply add those up and divide by five giving a 4 2 per year average return the geometric mean would instead be calculated as 1 2 x 1 06 x 0 9 x 0 99 x 1 06 1 5 1 3 74 per year average return note that the geometric mean a more accurate calculation in this case will always be smaller than the arithmetic mean | |
what is an arm s length transaction | an arm s length transaction refers to a business deal in which buyers and sellers act independently without one party influencing the other arm s length transactions assert that both parties act in their own self interest and are not subject to pressure from the other party they also assure others that there is no collusion between the buyer and seller in the interest of fairness both parties usually have equal access to information related to the deal understanding arm s length transactionsarm s length transactions are commonly used in real estate deals because the sale affects not only those who are directly involved in the deal but other parties as well including lenders if two strangers are involved in the sale and purchase of a house the final agreed upon price is likely close to the fair market value fmv assuming that both parties have equal bargaining power and the same information about the property the seller would want a price that s as high as possible and the buyer would want a price that is as low as possible otherwise the agreed upon price is not likely to differ from the property s actual fmv as noted above the buyer and seller aren t the only ones involved in an arm s length transaction this type of transaction also has a direct impact on the financing needed from a bank as well as municipal and local taxes the transaction can also influence comparable prices in the market arm s length vs non arm s length transactionsfamily members and companies with related shareholders generally don t engage in arm s length sales instead the deals between them are non arm s length transactions this type of transaction which is also known as an arm in arm transaction refers to a business deal in which buyers and sellers have an identity of interest put simply buyers and sellers have an existing relationship that is either business related or personal an existing relationship tends to influence the terms of a non arm s length transaction for instance it s unlikely that a transaction involving a father and his son would yield the same result as a deal between strangers because the father may choose to give his son a discount if the sale of a house between father and son is taxable tax authorities may require the seller to pay taxes on the gain he would have realized had he been selling to a neutral third party they would disregard the actual price paid by the son in the same way international sales between non arm s length companies such as two subsidiaries of the same parent company must be made using arm s length prices this practice known as transfer pricing assures that each country collects the appropriate taxes on the transactions 1tax laws throughout the world are designed to treat the results of a transaction differently when parties are dealing at arm s length and when they are not 2arm s length transactions and fair market value fmv as noted above one of the main benefits of arm s length transactions is that the transaction is fair and equitable this is especially true when it comes to real estate deals when the buyer and seller have no previous relationship the terms of the deal notably the sale price accurately reflect market conditions rather than being influenced by other factors this value is referred to as the fair market value fmv is the best possible price that a neutral and impartial seller and buyer are willing to accept and pay to close the deal the following are just some of the factors that are used to determine the fmv of a home of course other factors also work into the fmv of a home including interest rates and the condition of the overall economy example of an arm s length transactionlet s use a hypothetical example to show how arm s length transactions work we can start by expanding on the example above using the father and son and the real estate transaction for clarity s sake let s say the father s name is john and the son s name is henry assume that john is selling his home and puts the house up for sale for 350 000 he gets an offer for that amount based on the fmv the potential buyer looked at some of the factors affecting the value including the location amenities and comparable homes if the sale goes through it s considered an arm s length transaction but henry throws john a loop saying he needs a new place and would like to buy the home for himself he offers a lower price of 275 000 since it s his father who s selling the house if john decides to accept he would be conducting a non arm s length transaction | |
what is the difference between an arm s length transaction and other sales | the term arm s length transaction refers to transactions that are conducted between parties who are acting independently from one another and are not associated with one another outside of the transaction in question by contrast a transaction would not be arm s length if the buyer and seller are personally related such as family members or personal friends transactions between related businesses such as those made between a parent company and its subsidiary would also not be arm s length | |
why are arm s length transactions important | the question of whether or not a transaction is arm s length matters because it can have legal and tax implications for example when a multinational corporation engages in transactions with its affiliated companies throughout the world it must ensure that those transactions are made at fair market values to ensure that the correct taxes are paid in each jurisdiction similarly conglomerates and holding companies can potentially run into legal and regulatory challenges if the companies within their organization do not transact with one another at arm s length ultimately arm s length transactions are intended to encourage fair and reasonable business practices and to protect the public at large | |
what are some examples of non arm s length transactions | to illustrate consider the case of a mother who wishes to sell her car to her son she might choose to give her son a discount on the car even though she could obtain a higher price if she sold it to an arms length buyer in this scenario the transaction is not arm s length because the buyer and seller are already associated as family members although this example is benign other examples could be more harmful for instance if the founder of a publicly traded company engages in nepotism by appointing one of their family members to an important position within the company even though other more qualified candidates were available this decision could harm the company s shareholders the bottom lineevery buyer and seller wants to get the best price possible for their financial transactions one of the best ways to do so is to conduct an arm s length transaction being at arm s length means there are no personal factors that influence the price and the decision to either accept or reject an offer those who execute non arm s length transactions may not get the best price which can also affect the overall market and lending decisions | |
what is the arms index trin | the arms index also called the short term trading index trin is a technical analysis indicator that compares the number of advancing and declining stocks ad ratio to advancing and declining volume ad volume it s used to gauge overall market sentiment richard w arms jr invented the trin in 1967 and it measures the relationship between market supply and demand it serves as a predictor of future price movements in the market primarily on an intraday basis it does this by generating overbought and oversold levels which indicate when the index and the majority of stocks in it will change direction image by sabrina jiang investopedia 2021formula for arms index trin trin advancing stocks declining stocksadvancing volume declining volumewhere advancing stocks number of stocks that are higheron the daydeclining stocks number of stocks that are loweron the dayadvancing volume total volume of all advancingstocksdeclining volume total volume of all decliningstocks begin aligned text trin frac text advancing stocks declining stocks text advancing volume declining volume textbf where begin aligned text advancing stocks text number of stocks that are higher text on the day end aligned begin aligned text declining stocks text number of stocks that are lower text on the day end aligned begin aligned text advancing volume text total volume of all advancing text stocks end aligned begin aligned text declining volume text total volume of all declining text stocks end aligned end aligned trin advancing volume declining volumeadvancing stocks declining stocks where advancing stocks number of stocks that are higheron the day declining stocks number of stocks that are loweron the day advancing volume total volume of all advancingstocks declining volume total volume of all decliningstocks | |
how to calculate the arms index trin | trin is provided in many charting applications to calculate by hand use the following steps | |
what does the arms index trin tell you | the arms index seeks to provide a more dynamic explanation of overall movements in the composite value of stock exchanges such as the nyse or nasdaq by analyzing the strength and breadth of these movements an index value of 1 0 indicates that the ratio of ad volume is equal to the ad ratio the market is said to be in a neutral state when the index equals 1 0 since the up volume is evenly distributed over the advancing issues and the down volume is evenly distributed over the declining issues many analysts believe that the arms index provides a bullish signal when it s less than 1 0 since there s more volume in the average up stock than the average down stock in fact some analysts have found that the long term equilibrium for the index is below 1 0 potentially confirming that there is a bullish bias to the stock market 1on the other hand a reading of greater than 1 0 is typically seen as a bearish signal since there s more volume in the average down stock than the average up stock 1the farther away from 1 00 the arms index value is the greater the contrast between buying and selling on that day a value that exceeds 3 00 indicates an oversold market and that bearish sentiment is too dramatic this could mean an upward reversal in prices index is coming conversely a trin value that dips below 0 50 may indicate an overbought market and that bullish sentiment is overheating traders look not only at the value of the indicator but also at how it changes throughout the day they look for extremes in the index value for signs that the market may soon change directions the difference between the arms index trin and the tick index tick trin compares the number of advancing and declining stocks to the volume of both advancing and declining stocks the tick index compares the number of stocks making an uptick to the number of stocks making a downtick the tick index is used to gauge intraday sentiment the tick index does not factor in volume but extreme readings still signal potentially overbought or oversold conditions | |
don t confuse the trin index for the share price of trinity capital trin 2 | limitations of using the arms index trin the arms index has a few mathematical peculiarities that traders and investors should be aware of when using it since the index emphasizes volume inaccuracies arise when there isn t as much advancing volume in advancing issues as expected this may not be a typical situation but it s a situation that can arise and could potentially make the indicator unreliable here are two examples of instances where problems may occur one way to solve this problem would be to separate the two components of the indicator into issues and volume instead of using them in the same equation for instance advancing issues divided by declining issues could show one trend while advancing volume over declining volume could show a separate trend these ratios are called the advance decline ratio and upside downside ratio respectively both of these could be compared to tell the market s true story | |
how do you use the trin indicator | investors use the trin indicator to gauge the overall sentiment of the market a high trin indicates that falling stocks are trading at a greater value than rising stocks suggesting that the market is overall headed downwards a low trin indicates that rising stocks have a greater volume than falling stocks this index can be used to predict future price movements | |
what is the tick index | the tick index measures relative market movements similar to the trin the tick index measures the number of stocks trading on an uptick compared to the number of stocks on a downtick unlike trin it does not account for the trading volume | |
what is a good trin ratio | a trin index below 1 0 is usually a bullish sign indicating that the market is advancing however it is important to understand the peculiarities of the trin formula because there are some circumstances where it can generate false signals 1the bottom linethe arms index also known as the trin is part of the galaxy of technical indicators used to measure and predict the movements of the stock market this indicator reflects the market as a whole and is used to predict when the overall sentiment of market participants is becoming bullish or bearish as with other technical indicators it is most effective when combined with other analytical tools | |
what is the aroon indicator | the aroon indicator is a technical indicator that can identify trend changes in the price of an asset as well as that trend s strength the aroon indicator essentially measures the time between highs and the times between lows over various periods strong uptrends will regularly see new highs and strong downtrends will regularly see new lows the indicator consists of the aroonup line and the aroondown line the aroon indicator was developed by tushar chande 1formula and how to calculate the aroon indicatoraroon up 25 periods since 25 period high25 100aroon down 25 periods since 25 period low25 100 begin aligned text aroon up frac 25 text periods since 25 period high 25 ast100 text aroon down frac 25 text periods since 25 period low 25 ast100 end aligned aroon uparoon down 2525 periods since 25 period high 100 2525 periods since 25 period low 100 the aroon calculation requires the tracking of the high and low prices typically over 25 periods understanding the aroon indicatorthe aroon indicator was created by tushar chande in 1995 21 it is used by technical analysts to identify how strong asset price trends are as well as any changes in asset prices the main assumption underlying this indicator is that a stock s price will close regularly at new highs during an uptrend and regularly make new lows in a downtrend this is primarily shown through an up line and a down line the aroonup and the aroondown measure the strength of the uptrend and the strength of the downtrend respectively these lines fluctuate between zero and 100 values close to 100 indicate a strong trend and values near zero indicate a weak trend where the lower the aroonup the weaker the uptrend and the stronger the downtrend and vice versa the indicator focuses on the last 25 periods but is scaled to zero and 100 therefore an aroonup reading above 50 means the price made a new high within the last 12 5 periods a reading near 100 means a high was seen very recently the same concepts apply to the aroondown when it is above 50 a low was witnessed within the 12 5 periods an aroondown reading near 100 means a low was seen very recently crossovers can signal entry or exit points up crossing above down can be a signal to buy down crossing below up may be a signal to sell when both indicators are below 50 it can signal that the price is consolidating new highs or lows are not being created traders can watch for breakouts as well as the next aroon crossover to signal which direction the price is going limitations of using the aroon indicatorthe aroon indicator may signal a good entry or exit point in other cases it will provide poor or false signals the buy or sell signal may occur too late after a substantial price move has already occurred this happens because the indicator looks backward and isn t predictive a crossover may look good on the indicator but that doesn t mean the price will necessarily make a big move the indicator isn t factoring the size of moves it only cares about the number of days since a high or low even if the price is relatively flat crossovers will occur as eventually a new high or low will be made within the last 25 periods traders still need to use price analysis and potentially other indicators to make informed trading decisions relying solely on one indicator isn t advised aroon indicator vs directional movement index dmi the aroon indicator is similar to the directional movement index dmi which was developed by j welles wilder in 1978 3 this is also a technical indicator that uses up and down lines to show the direction of a trend the main difference between these two indicators is that the aroon indicator formulas are primarily focused on the amount of time between highs and lows the dmi on the other hand measures the price difference between the current highs lows and prior highs lows therefore the main factor in the dmi is the price rather than time example of how to use the aroon indicatorthe following chart shows an example of the aroon indicator and how it can be interpreted the chart shows there is both the aroon indicator and an oscillator that combines both lines into a single reading of between 100 and 100 the crossover of the aroonup and aroondown indicates a reversal in the trend while the index was trending before the reversal the aroondown remained very low this suggests that the index had a bullish bias despite the rally on the far right the aroon indicator hasn t shown a bullish bias yet this is because the price rebounded so quickly that it hasn t made a new high in the last 25 periods at the time of the screenshot despite the rally | |
how does the aroon indicator work | the aroon indicator is a tool used by technical analysts to show whether the price of an asset is trending whether it s in a trending range whether the trend is beginning and the overall strength of the trend this indicator works by measuring the periods between the highs and the periods between the lows over a certain time aroonup and aroondown lines are used to measure the length of time between the recording of a new high or low within a certain period | |
what is the best period for the aroon indicator | the aroon indicator is typically applied to 25 periods of data this means that the indicator shows how many periods it has been since a 25 period high or low or a period during which the high and low can be tracked the indicator ranges between 0 and 100 when the indicator trends above 50 it means that the last 12 periods showed a high or low point a reading below 50 highlights a high low trend within 13 periods | |
what s the difference between the aroon indicator and macd | the aroon indicator and the moving average convergence divergence macd are two tools used by technical traders that identify price trends while the aroon indicator measures the strength of price trends the macd signals changes in the length of time direction strength and momentum of a trend like most indicators the aroon indicator is best used when combined with others such as a macd the bottom linethe aroon indicator is a technical tool that can help traders identify trends in price changes as well as the strength of those trends as with any trading tool traders should understand how they work before applying them in their trading strategies rather than using it alone it s advisable to use the aroon indicator with other tools such as the macd this helps traders avoid major losses in their trading activities | |
what is the aroon oscillator | the aroon oscillator is a trend following indicator that uses aspects of the aroon indicator aroon up and aroon down to gauge the strength of a current trend and the likelihood that it will continue understanding the aroon oscillatoraroon oscillator readings above zero indicate that an uptrend is present while readings below zero indicate that a downtrend is present traders watch for zero line crossovers to signal potential trend changes they also watch for big moves above 50 or below 50 to signal strong price moves the aroon oscillator was developed by tushar chande in 1995 as part of the aroon indicator system chande s intention for the system was to highlight short term trend changes the name aroon is derived from the sanskrit language and roughly translates to dawn s early light the aroon indicator system includes aroon up aroon down and aroon oscillator the aroon up and aroon down lines must be calculated first before drawing the aroon oscillator this indicator typically uses a timeframe of 25 periods however the timeframe is subjective using more periods garners fewer waves and a smoother looking indicator using fewer periods generates more waves and a quicker turnaround in the indicator the oscillator moves between 100 and 100 a high oscillator value is an indication of an uptrend while a low oscillator value is an indication of a downtrend aroon up and aroon down move between zero and 100 on a scale of zero to 100 the higher the indicator s value the stronger the trend for example a price reaching new highs one day ago would have an aroon up value of 96 25 1 25 x100 similarly a price reaching new lows one day ago would have an aroon down value of 96 25 1 x100 the highs and lows used in the aroon up and aroon down calculations help to create an inverse relationship between the two indicators when the aroon up value increases the aroon down value will typically see a decrease and vice versa | |
when aroon up remains high from consecutive new highs the oscillator value will be high following the uptrend when a security s price is on a downtrend with many new lows the aroon down value will be higher resulting in a lower oscillator value | the aroon oscillator line can be included with or without the aroon up and aroon down when viewing a chart significant changes in the direction of the aroon oscillator can help to identify a new trend aroon oscillator formula and calculationthe formula for the aroon oscillator is aroon oscillator aroon up aroon downaroon up 100 25 periods since 25 period high 25aroon down 100 25 periods since 25 period low 25 begin aligned text aroon oscillator text aroon up text aroon down text aroon up 100 frac left 25 text periods since 25 period high right 25 text aroon down 100 frac left 25 text periods since 25 period low right 25 end aligned aroon oscillator aroon up aroon downaroon up 100 25 25 periods since 25 period high aroon down 100 25 25 periods since 25 period low to calculate the aroon oscillator aroon oscillator differs from the rate of change roc indicator in that the former is tracking whether a 25 period high or low occurred more recently while the latter tracks the momentum by looking at highs and lows and how far the current price has moved relative to a price in the past aroon oscillator trade signalsthe aroon oscillator can generate trade signals or provide insight into the current trend direction of an asset | |
when the oscillator moves below zero the aroon down is crossing below the aroon up a low occurred more recently than a high which could signal that a downtrend is starting | limitations of using the aroon oscillatorthe aroon oscillator keeps a trader in a trade when a long term trend develops during an uptrend for example the price tends to keep achieving new highs which keep the oscillator above zero during choppy market conditions the indicator will provide poor trade signals as the price and the oscillator whipsaw back and forth the indicator may provide trade signals too late to be useful the price may have already run a significant course before a trade signal develops the price may be due for a retracement when the trade signal is appearing the number of periods is also arbitrary and there is no validity that a more recent high or low within the last 25 periods will guarantee a new and sustained uptrend or downtrend the indicator is best used in conjunction with price action analysis fundamentals of long term trading and other technical indicators investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal | |
what is arrow s impossibility theorem | arrow s impossibility theorem is a social choice paradox illustrating the flaws of ranked voting systems it states that a clear order of preferences cannot be determined while adhering to mandatory principles of fair voting procedures arrow s impossibility theorem named after economist kenneth j arrow is also known as the general impossibility theorem understanding arrow s impossibility theoremdemocracy depends on people s voices being heard for example when it is time for a new government to be formed an election is called and people head to the polls to vote millions of voting slips are then counted to determine who is the most popular candidate and the next elected official according to arrow s impossibility theorem in all cases where preferences are ranked it is impossible to formulate a social ordering without violating one of the following conditions arrow s impossibility theorem part of social choice theory an economic theory that considers whether a society can be ordered in a way that reflects individual preferences it was lauded as a major breakthrough and went on to be widely used for analyzing problems in welfare economics 1example of arrow s impossibility theoremlet s look at an example illustrating the type of problems highlighted by arrow s impossibility theorem consider the following example where voters are asked to rank their preference among three projects a b and c this country has 99 voters who are each asked to rank the order from best to worst for which of the three projects should receive the annual funding in this scenario 66 voters prefer a over b 66 voters prefer b over c and 66 voters prefer c over a this represents a paradoxical result as a two thirds majority of voters prefer a over b b over c and c over a arrow s theorem posits that it is impossible to formulate a social ordering on a problem such as indicated in this example without violating one of the above conditions 1arrow s impossibility theorem is also applicable when voters are asked to rank political candidates however there are other popular voting methods such as approval voting or plurality voting that do not use this framework history of arrow s impossibility theoremthe theorem is named after economist kenneth j arrow arrow who had a long teaching career at harvard university and stanford university introduced the theorem in his doctoral thesis and later popularized it in his 1951 book social choice and individual values the original paper titled a difficulty in the concept of social welfare earned him the nobel memorial prize in economic sciences in 1972 12arrow s research has also explored the social choice theory endogenous growth theory collective decision making the economics of information and the economics of racial discrimination among other topics | |
what is social choice theory | social choice theory is a field of study focused on the mechanisms of collective decision making the central questions of the field include voting systems and group choices it has ramifications in economics politics behavioral science and beyond who was kenneth j arrow kenneth j arrow was an american economist well known for his contributions to general equilibrium theory and welfare theory 3 in 1972 arrow became the youngest person to be awarded the nobel memorial prize in economic sciences arrow taught at numerous institutions including stanford university harvard university and the university of chicago and at least five of his students have gone on to win the nobel prize as well | |
what is independence of irrelevant alternatives | independence of irrelevant alternatives is an assumed condition within decision theory that states that preferences among options should be unchanged if additional but irrelevant alternatives are introduced 4 in the context of an election consider a ballot with multiple candidates if a losing candidate were to be eliminated from the ballot the result of the election should not change under the condition of independence of irrelevant alternatives if it does change then the condition has been violated the bottom linearrow s impossibility theorem states that it is impossible to reach a group decision through ranked voting without violating one or more of the key conditions of nondictatorship pareto efficiency independence of irrelevant alternatives unrestricted domain and social ordering the theorem falls under the umbrella of social choice theory or the study of collective decision making it is named after economist kenneth j arrow a nobel prize winning researcher | |
what is article 50 | article 50 is a clause in the european union s eu lisbon treaty that outlines the steps to be taken by a country seeking to leave the bloc voluntarily invoking article 50 kick starts the formal exit process and allows countries to officially declare their intention to leave the eu the united kingdom was the first country to invoke article 50 after a majority of british voters elected to leave the union in 2016 | |
how article 50 works | article 50 is part of the lisbon treaty which was signed and ratified by all 27 member states of the european union in 2007 and came into effect in 2009 3 the article outlines how a member nation may leave the eu voluntarily as noted above the article states any member state may decide to withdraw from the union in accordance with its own constitutional requirements 1according to the article s text algeria left the european economic community after gaining independence from france in 1962 while greenland left through a special treaty in 1985 special considerationsarticle 50 became a subject of serious discussion during the european sovereign debt crisis of 2010 to 2014 when greece s economy appeared to be spiraling out of control in an attempt to save the euro and perhaps the eu from collapsing leaders considered expelling greece from the eurozone the problem they encountered with article 50 was that there was no clear guidance for pushing a member state out against its will nor was it necessary to remove greece from the eu just from the eurozone greece was eventually able to reach agreements with its eu creditors origins of article 50the european union began in 1957 as the european economic community which was created to foster economic interdependence among its members in the aftermath of world war ii the original bloc comprised six european countries the netherlands france belgium west germany luxembourg and italy they were joined by the u k denmark and ireland in 1973 the eu was formally created by the maastricht treaty in 1992 and by 1995 the bloc expanded to 15 members covering the whole of western europe from 2004 to 2007 the eu experienced its largest ever expansion taking on 12 new members that included former communist states 5the lisbon treaty was drafted with a view to enhancing the efficiency and democratic legitimacy of the union and to improving the coherence of its action the treaty was signed and ratified by all 27 member states in 2007 and came into effect in 2009 the treaty is divided into two parts the treaty on european union teu and the treaty on the functioning of the european union tfeu it has 358 articles in total including article 50 6the author of the provision did not originally see it as being necessary if you stopped paying the bills and you stopped turning up at the meetings in due course your friends would notice that you seemed to have left the scottish peer lord kerr of kinlochard told the bbc in november 2016 he saw article 50 as being potentially useful in the event of a coup which would lead the eu to suspend the affected country s membership i thought that at that point the dictator in question might be so cross that he d say right i m off and it would be good to have a procedure under which he could leave 7example of article 50the first country to invoke article 50 was the united kingdom which left the eu on jan 31 2020 8 it came after a majority of british citizens voted to leave the union and pursue brexit in a referendum on june 23 2016 leading british prime minister theresa may to invoke the article on march 29 2017 the process was mired by missed deadlines extensions negotiations and stumbling blocks put forth by both british and eu leaders may s attempts for an agreement were rejected by parliament negotiations were renewed by boris johnson who became prime minister after may resigned the country began an 11 month transition period immediately after its departure from the bloc after leaving the union there were no british officials in the european parliament and the u k lost its veto right within the eu but the two parties still had to work out a new trade agreement there were still many issues to resolve during the transition period including one big cause for concern was the issue of eu nationals migrating to the u k or vice versa prior to brexit an estimated three million eu nationals lived worked or studied in the u k while one million u k nationals did the same in the rest of the eu nationals were allowed to cross borders during the transition period but were afterward subject to visa requirements 9negotiations continued during the transition period despite many halts and roadblocks on dec 24 2020 the two sides finally announced a trade deal that would replace the eu s single market and its customs union with respect to the united kingdom the eu uk trade and cooperation agreement was signed on dec 30 and provisionally entered force on jan 1 however it was not fully ratified until the following april the new trade agreement fully entered force on may 1 2021 10 | |
what are articles of association | articles of association are internal documents and rules to specify the regulations for a company s operations and define the company s purpose it outlines how tasks are to be accomplished within the organization including the process of appointing directors and handling financial records investopedia crea taylor | |
what the articles include | articles of association identify how a company issues shares pays dividends audits financial records and provides voting rights this set of rules can be considered a user s manual for the company the content varies from jurisdiction to jurisdiction but this document holds a similar format globally and commonly outlines 1a company may or may not issue shares but if they are found in the articles of association they can be issued if needed small business examplea person or group of people starting a business will typically refer to a lawyer accountant or both for advice when setting up a company the company will choose a name and define its purpose the company is then registered at the state or federal level a company may issue shares to divide the company but it doesn t need to the articles lay out how this can be done the lawyer or accountant will typically work with the company directors to define how they structure the company the articles include the company directors along with their personal information and a business address changes can be made to the articles of association with director s approval | |
how do articles of association differ from articles of incorporation | articles of association are internal documents that define a company s purpose as a business key information such as the name and how shares are structured articles of incorporation are formal documents filed with a government body to form a corporation legally articles of incorporation include the firm s name street address agent for service of process and the amount and type of stock to be issued | |
what are articles of organization | articles of organization are legal documents used to establish a limited liability company llc at the state level who creates the articles of association a company s founders typically create its articles of association because it is an important document addressing the company s management and finances the creators do so in consultation with lawyers accountants or both the bottom linearticles of association define what a company is and how it operates this includes fundamental information such as the company s name its founders and original shareholders the purpose driving the company how shareholders meetings are conducted and how directors are hired | |
what are articles of incorporation | articles of incorporation are a set of formal documents filed with a government body to legally document the creation of a corporation articles of incorporation generally contain pertinent information such as the firm s name street address agent for service of process and the amount and type of stock to be issued the articles of incorporation are used to legally form the corporation understanding articles of incorporationmany businesses in the u s and canada are formed as a corporation which is a type of business operation that is formed in the state where the company carries out its operations to be recognized legally as a corporation a business must incorporate by taking certain steps and making certain decisions required under corporate law one such step is filing a document known as articles of incorporation articles of incorporation are in the document necessary to register a corporation with a state and acts as a charter to recognize the establishment of a corporation the document outlines the basic information needed to form a corporation the governance of a corporation and the corporate statutes in the state where the articles of incorporation are filed articles of incorporation are also referred to as the corporate charter articles of association or certificate of incorporation | |
where to file articles of incorporation | in the u s articles of incorporation are filed with the office of the secretary of state in the state where the business chooses to incorporate 1 some states offer more favorable regulatory and tax environments and as a result attract a greater proportion of firms seeking incorporation for example delaware and nevada attract about half of the public corporations in the u s in part because of the state laws that protect their corporations once established the articles become a public record and provide important information about the corporation many states charge filing fees for a business that incorporates in the state whether the business operates there or not a business that is incorporated in one state and is physically located or doing business in another state must register in the other state as well which involves paying that state s filing fees and taxes depending on the state of incorporation a company may pay filing fees ranging from 50 as in iowa arkansas and michigan to 275 as in massachusetts as of 2020 2345 the fees can vary depending on whether the articles of incorporation were filed online or by mail articles of incorporation document requirementsthe articles in the document vary by state but the following items i e articles are typically included most states also require the articles to state the firm s purpose though the corporation may define its purpose very broadly to maintain flexibility in its operations amazon s certificate of incorporation for example states that the corporation s purpose is to engage in any lawful act or activity for which corporations may be organized under the general corporation law of delaware 6other provisions outlined in a company s articles of incorporation may include the limitation of the directors liability actions by stockholders without a meeting and the authority to call special meetings of stockholders each state has certain mandatory provisions that must be contained in the articles of incorporation and other optional provisions that the company can decide whether to include while domestic companies will submit an article of incorporation foreign corporate entities must file a certificate of registration to operate in a given state articles of incorporation vs other documentswhile the articles of incorporation are externally filed formation documents bylaws are more of use to a company when used internally bylaws set the internal processes and organization of how the company should be run bylaws outline the rules and procedures for the management of a company not all states require a company to maintain bylaws though many require a company to formally memorialize the bylaws articles of incorporation are required state filings to form a corporation while llc operating agreements are used exclusively for llcs in addition the articles of incorporation outline the information structure of the company meanwhile operating agreements often outline how internal disputes will be resolved between members or owners an llc operating agreement acts more of a personal protection document than the articles of incorporation a business license often permits a company to operate within a specific jurisdiction or industry it gives the holder the right to start and run a business in the designed geographical location that issues the license the rights granted by a business license are often more specific and niche than the articles of incorporation though similar information may be required for both the articles of incorporation simply legally form an organization and is the highest governing document for a corporation a business plan is an internal document that may be shared with major customers investors or lending institutions that communicates the formal operating plan of a company often a strategic document a business plan is mainly used by internal management as a roadmap for decision making this is in stark contrast of the articles of incorporation which are information only non strategic requirements for legal reasons a company should internally maintain a copy of its articles of incorporation request importance of articles of incorporationa corporation should take care when filings its articles of incorporation as these formation documents carry great significance for starters they are legally required to structure a new business or company the corporation can not form and be recognized by the state as a legal business entity until the forms are registered once a business is incorporated it often has a greater ability to raise capital via stock issuances a corporation cannot sell stock until is incorporated via the filing of its articles of incorporation corporations may also receive more favorable tax treatment compared to individual or personal tax rates in addition there are personal liability considerations for companies being formed individuals are often held liable for a company s obligations until it is incorporated by forming a legal corporation business owners may be shielded from some personal liability for the company s debts this liability protection cannot occur until the articles of incorporation have been filed example of articles of incorporationthe image below captures the first few requirements from the secretary of state form required by the state of washington this form is to be completed and returned to the government agency for review 7some sections simply require a check mark for applicability or a yes no mutually exclusive selection other areas such as the purpose of the corporation require written response as designated by the top of the form this specific article of incorporation document template is for specific use for the formation of non profit corporations the washington state articles of incorporation form ends with the certification section in which an incorporator must certify the information given is correct to the best of their knowledge the incorporator is also required to provide some personal information along with their signature the form above had been filed by parrot foundation a washington nonprofit organization a snipped of parrot foundation s articles of incorporation has been provided below as an example of the dates structure and business purpose a company may request when filing its articles of incorporation 8 | |
what is the purpose of the articles of incorporation | the purpose of the articles of incorporation is to legally form a corporation the filing submits information to a state agency and the state agency officially determines whether the corporation can be recognized as a formal company once incorporated the business may receive a number of different benefits mentioned below via its status as a corporation | |
what are the benefits of filing articles of incorporation | by filing articles of incorporation a company can officially become incorporated once incorporated the company may receive favorable tax benefits and have the ability to raise capital by issuing stock in addition the owners of the corporation have different liability over company debts once a corporation is formed | |
how do you write articles of incorporation | articles of incorporation are filed with your state s secretary of state office that department provides a form that requests a variety of information about your newly forming corporation upon completing the required fields the form is submit back to the secretary of state for review the state agency that reviews the form will contact you should they have any clarifying questions regarding your information can one person submit articles of incorporation yes it is possible to incorporate a business with just one employee that single owner will be responsible for all aspects of the company in addition that sole individual will be the only shareholder however they may be listed as the only member on the articles of incorporation the bottom lineif a company wants to become a corporation it must file articles of incorporation with its appropriate state agency this formation document is required as part of the incorporation process and the articles provide the state a variety of information about the company and its incorporators different from other legal documents that outline how a company will operate internally the article of incorporation is intended to help external parties evaluate and form a corporation | |
what is artificial intelligence ai | artificial intelligence ai technology allows computers and machines to simulate human intelligence and problem solving tasks the ideal characteristic of artificial intelligence is its ability to rationalize and take action to achieve a specific goal ai research began in the 1950s and was used in the 1960s by the united states department of defense when it trained computers to mimic human reasoning 1a subset of artificial intelligence is machine learning ml a concept that computer programs can automatically learn from and adapt to new data without human assistance | |
how artificial intelligence ai works | artificial intelligence commonly brought to mind the implementation of robots as technology evolved previous benchmarks that define artificial intelligence became outdated technologies that enable artificial intelligence include 1algorithms often play a part in the structure of artificial intelligence where simple algorithms are used in simple applications while more complex ones help frame strong artificial intelligence types of artificial intelligencenarrow ai also known as weak ai this system is designed to carry out one particular job weak ai systems include video games like personal assistants like amazon s alexa and apple s siri users ask the assistant a question and it answers it for you general ai this type includes strong artificial intelligence systems that carry on the tasks considered to be human like they tend to be more complex and complicated and can be found in applications like self driving cars or hospital operating rooms super ai is a strictly theoretical type of ai and has not yet been realized super ai would think reason learn and possess cognitive abilities that surpass those of human beings using artificial intelligenceartificial intelligence can be applied to many sectors and industries including the healthcare industry for suggesting drug dosages identifying treatments and aiding in surgical procedures in the operating room other examples of machines with artificial intelligence include computers that play chess and self driving cars ai has applications in the financial industry where it detects and flags fraudulent banking activity applications for ai can help streamline and make trading easier in 2022 ai entered the mainstream with applications of generative pre training transformer the most popular applications are openai s dall e text to image tool and chatgpt according to a 2024 survey by deloitte 79 of respondents who are leaders in the ai industry expect generative ai to transform their organizations by 2027 2 | |
what is reactive ai | reactive ai is a type of narrow ai that uses algorithms to optimize outputs based on a set of inputs chess playing ais for example are reactive systems that optimize the best strategy to win the game reactive ai tends to be fairly static unable to learn or adapt to novel situations | |
what are the concerns surrounding the use of ai | many are concerned with how artificial intelligence may affect human employment with many industries looking to automate certain jobs with intelligent machinery there is a concern that employees would be pushed out of the workforce self driving cars may remove the need for taxis and car share programs while manufacturers may easily replace human labor with machines making people s skills obsolete | |
how is ai used in healthcare | in healthcare settings ai is used to assist in diagnostics ai can identify small anomalies in scans to better triangulate diagnoses from a patient s symptoms and vitals ai can classify patients maintain and track medical records and deal with health insurance claims the bottom lineartificial intelligence ai is an evolving technology that tries to simulate human intelligence using machines ai encompasses various subfields including machine learning ml and deep learning which allow systems to learn and adapt in novel ways from training data it has vast applications across multiple industries such as healthcare finance and transportation while ai offers significant advancements it also raises ethical privacy and employment concerns | |
what is an ascending channel | an ascending channel is the price action contained between upward sloping parallel lines higher highs and higher lows characterize this price pattern technical analysts construct an ascending channel by drawing a lower trend line that connects the swing lows and an upper channel line that joins the swing highs 1the pattern s opposite counterpart is the descending channel understanding ascending channelswithin an ascending channel price does not always remain entirely contained within the pattern s parallel lines but instead shows areas of support and resistance that traders can use to set stop loss orders and profit targets a breakout above an ascending channel can signal a continuation of the move higher while a breakdown below an ascending channel can indicate a possible trend change 1ascending channels show a clearly defined uptrend traders can swing trade between the pattern s support and resistance levels or trade in the direction of a breakout or breakdown image by sabrina jiang investopedia 2021trading the ascending channelascending channel vs envelope channelsenvelope channels are another popular channel formation that can incorporate both descending and ascending channel patterns envelope channels are typically used to chart and analyze a security s price movement over a longer period of time whereas ascending and descending channels can be beneficial for charting a security s price immediately after a reversal trend lines can be based on moving averages or highs and lows over specified intervals two of the most common envelope channels include bollinger bands and donchian channels | |
what is an ascending triangle | an ascending triangle is a chart pattern used in technical analysis it is created by price moves that allow for a horizontal line to be drawn along the swing highs and a rising trendline to be drawn along the swing lows the two lines form a triangle traders often watch for breakouts from triangle patterns the breakout can occur to the upside or downside ascending triangles are often called continuation patterns since price will typically break out in the same direction as the trend that was in place just prior to the triangle forming 1an ascending triangle is tradable in that it provides a clear entry point profit target and stop loss level it may be contrasted with a descending triangle | |
what does the ascending triangle tell you | an ascending triangle is generally considered to be a continuation pattern meaning that the pattern is significant if it occurs within an uptrend or downtrend 1 once the breakout from the triangle occurs traders tend to aggressively buy or sell the asset depending on which direction the price broke out image by julie bang investopedia 2019increasing volume helps to confirm the breakout as it shows rising interest as the price moves out of the pattern a minimum of two swing highs and two swing lows are required to form the ascending triangle s trendlines but a greater number of trendline touches tends to produce more reliable trading results since the trendlines are converging on one another if the price continues to move within a triangle for multiple swings the price action becomes more coiled likely leading to a stronger eventual breakout volume tends to be stronger during trending periods than during consolidation periods a triangle is a type of consolidation and therefore volume tends to contract during an ascending triangle as mentioned traders look for volume to increase on a breakout as this helps confirm the price is likely to keep heading in the breakout direction if the price breaks out on low volume that is a warning sign that the breakout lacks strength this could mean the price will move back into the pattern this is called a false breakout for trading purposes an entry is typically taken when the price breaks out buy if the breakout occurs to the upside or short sell if a breakout occurs to the downside a stop loss is placed just outside the opposite side of the pattern for example if a long trade is taken on an upside breakout a stop loss is placed just below the lower trendline a profit target can be estimated based on the height of the triangle added or subtracted from the breakout price the thickest part of the triangle is used if the triangle is 5 high add 5 to the upside breakout point to get the price target if the price breaks lower the profit target is the breakout point less 5 example of how to interpret the ascending triangleinvestopedia sabrina jianghere an ascending triangle forms during a downtrend and the price continues lower following the breakout once the breakout occurred the profit target was attained the short entry or sell signal occurred when the price broke below the lower trendline a stop loss could be placed just above the upper trendline wide patterns like this present a higher risk reward than patterns that get substantially narrower as time goes on as a pattern narrows the stop loss becomes smaller since the distance to the breakout point is smaller yet the profit target is still based on the largest part of the pattern the difference between an ascending triangle and a descending trianglethese two types of triangles are both continuation patterns except they have a different look the descending triangle has a horizontal lower line while the upper trendline is descending this is the opposite of the ascending triangle which has a rising lower trendline and a horizontal upper trendline limitations of trading the ascending trianglethe main problem with triangles and chart patterns in general is the potential for false breakouts the price may move out of the pattern only to move back into it or the price may even proceed to break out the other side a pattern may need to be redrawn several times as the price edges past the trendlines but fails to generate any momentum in the breakout direction while ascending triangles provide a profit target that target is just an estimate the price may far exceed that target or fail to reach it psychology of the ascending trianglelike other chart patterns ascending triangles indicate the psychology of the market participants underlying the price action in this case buyers repeatedly drive the price higher until it reaches the horizontal line at the top of the ascending triangle the horizontal line represents a level of resistance the point where sellers step in to return the price to lower levels as the price drops downward from the horizontal resistance level buyers begin to show their resolve and the price fails to reach the recent low with the trend turning upward once again at a higher swing low in other words the upward sloping trendline that forms the lower boundary of the ascending triangle is acting as support the level where buyers jump in and prevent the price from falling any lower in a well defined ascending triangle pattern the price bounces between the horizontal resistance line and the lower trendline the lines of the triangle eventually converge setting the stage for a showdown between upward and downward pressure that could determine which direction the price will move out of the pattern as it approaches the vertex of the triangle the price will either break out above the resistance level suggesting additional gains ahead or it will fall below the support level increasing the likelihood that the price will decline | |
what are support and resistance levels | support and resistance levels represent points on a price chart where there is a likelihood of a letup or a reversal of the prevailing trend support occurs where a downtrend is expected to pause due to a concentration of demand while resistance occurs where an uptrend is expected to pause due to a concentration of supply 1 in an ascending triangle pattern the upward sloping lower trendline indicates support while the horizontal upper bound of the triangle represents resistance |
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