Payday loan advice

Countertrend Indicator

admin — Fri, 11 Dec 2009 07:19:05 +0000

Use the ARIMA confidence bands to determine overbought/Oversold levels. Not only. can a long position be entered when prices penetrate the lowest 95% confidence band. but they can be closed out when they return to the normal 50% level. A conservative trader will enter the market only in the direction of the ARIMA trend forecast. If the trend is up, only the penetrations of the lower band will be used to enter new long positions.

Corporations Partnerships Proprietorships

admin — Sun, 06 Dec 2009 07:18:00 +0000

The stockholders-of large corporations, through their elected board of directors, usually hire managers managers operate the firm efficiently and satisfy customers? Offering consumers value at a low cost is the ticket to profitability. In an owner-managed firm, the owner’s property right to the residual income provides a strong incentive both to reduce costs and to please consumers. This is not necessarily so for the managers of a corporation.
For a large corporation with many stockholders – millions in some cases – the situation is complex. Stockholders own the residual income (profits), but professional managers operate the firm. Stockholders want managers to cut costs while increasing output and revenues, but managers might want high salaries for themselves, large offices, first- class travel, and other expensive perks. They might also prefer the power and prestige associated with expanding the business (by taking over another firm, perhaps), even if it might reduce profitability. Can the stockholders control the actions of managers and direct them toward the pursuit of profitability? Direct control by many stockholders is unlikely. Few of them own enough shares to give them the incentive or information they would need to exercise direct control. Most find it too expensive even to attend the annual shareholders’ meeting, much less to monitor managers closely. Instead, stockholders elect a board of directors, which in turn appoints the company’s high-level managers. As the following series of posts describes, however, not all is lost when stockholders don’t directly run the company themselves. Internal corporate policies and competition for control of the firm by outsiders help mitigate principal-agent problems when managers run the company instead.

Corporations

admin — Tue, 01 Dec 2009 07:16:38 +0000

The business firms that are corporations account for more than 8.5 percent of total business revenue, even though they constitute only 20 percent of all firms. What accounts for the attractiveness of this business structure? From its start. by an Act of the British Parliament in 1862, the corporation, or “joint stock company,” as it is also called, grew in importance for two main reasons. First, although the stockholders of the corporation are the Iegal owners, their liability is limited to the value of their shares of the corporation. If a Corporation owes you money, you cannot directly sue the stockholders. Of course, you can sue the corporation. However, if a corporation goes bankrupt, you and others to whom the firm owes money may simply be out of luck. This limited liability makes it possible for corporations to attract investment funds from a large number of “owners” who do not participate in the day-to-day management of the firm.
Second, ownership can easily be transferred under the corporate structure. The shares, or ownership rights, of an owner who dies can be sold by the heirs to another owner without disrupting the business firm. Because of this, the corporation is an ongoing concern. Similarly, stockholders who become unhappy with the way a corporation is run can hail out merely by selling their stock.

Proprietorship

admin — Thu, 26 Nov 2009 07:15:08 +0000

A Proprietorship is a business firm that is owned by a single individual who is fully liable for the debts of the firm. In addition to assuming the responsibilities of ownership, the proprietor often works directly for the firm, providing managerial and other labor services. Many small businesses, including neighborhood grocery stores, barbershops, and farms, are business proprietorships. Proprietorships account for 72 percent of the business firms in the United States. Because most proprietorships are small, however, they account for less than 5 percent of all business revenues.
A partnership consists of two or more persons who are co-owners of a business firm. The partners share risks and responsibilities in an agreed-upon manner. There is no difference between a proprietorship and a partnership in terms of owner liability. In both cases, the owners are fully liable for all business debts incurred by the firm. Many law, medical, and accounting firms are organized along partnership lines. However, this form of business structure accounts for only 8 percent of the total number of firms and 10percent of all business revenues.

Prices of options

admin — Sat, 21 Nov 2009 07:13:57 +0000

The price of an option that is freely traded on a commodity exchange fluctuates in response to price changes in the underlying commodity futures contract. The same anonymity exists between an option buyer and an option writer as exists between the buyer and the seller of a commodity futures contract. Like a futures position, an option position may be closed out at any time through simple transference to a third party, via an offsetting transaction made in the options trading pit on the floor of the futures exchange. There are fixed strike prices at which options on futures may be contracted, and each option has a fixed expiry date, preceding the expiry date of the underlying future by up to five weeks. Some actively traded commodities, such as gold, currencies, and the S&P500 stock market index have options expiring every month.
The life of an option is always less than the life of its associated futures contract, with 6 months being about the maximum term. Since an option is traded right up to its moment of expiry, the term to expiry of an option continuously diminishes with the passage of time. It is possible to buy or sell an option with a term to expiry as short as 1 minute.
An option is defined by its strike price and by its date of expiry. For example, the buyer of an August 360 gold call is buying the right to purchase a contract of August gold at $360 per ounce at any time up to and including the moment the option expires (expiry of August gold options is on the second Friday of July). Each listed option is traded independently of all others; for example, an August 360 gold call, and a September 370 gold call are separate and independent options contracts.
The price at which an option trades in the free market will depend upon the strike price of the option, the prevailing price of the futures contract to which the option is attached, the anticipated price variability in that futures contract, and the time remaining until expiry of the option. In the very short term, any increase in the price of a futures contract will result in higher call option values and lower put option values for options on that future. Likewise, any decrease in the price of a futures contract will result in higher put option values and lower call option values. Price variability in a futures contract will be the main determinant of the values that the market will place on its associated options. For this reason, and because there are so many options on each futures contract, price charts are not normally kept for options.
A call option is said to be in-the-money when its underlying future is trading at a price higher than the strike price of the option. An option which is in-the-money has real value even if exercised immediately; in practice, this is rarely done unless the option is so deep in the money that the buyer is willing to sacrifice a small residual option premium in favor of cash. When a call option has no immediate exercise value, it is said to be out-of-the- money, its market value deriving entirely from its potential, that is, the potential for the future to rise above the strike price during the remaining life of the option. Reverse arguments hold for put options. A put option is in-the-money when the futures price is under the strike price. An option with a strike price exactly equal to the futures price is said to be at-the-money and is the option in which trading is likely to be most active. Options are available at strike prices so far out of the money, and with such short times to expiry, that only a massive economic dislocation or a mammoth natural disaster could give them any terminal value. These options can be purchased for as little as $25, and very occasionally,like a lottery ticket, one of them will pay off.

Economic efficiency

admin — Mon, 16 Nov 2009 07:12:30 +0000

Economists make use of the standard of economic efficiency to evaluate the desirability of economic outcomes. We now want to explore it in more detail. The central idea of economic efficiency is straightforward. For any given level of cost, we want to obtain the largest possible benefit. Alternatively, we want to obtain any particular benefit for the least possible cost. Economic efficiency means getting the most value from the available resources-making the largest pie from the available set of ingredients, so to speak. Economists acknowledge that individuals generally do not regard the efficiency of the entire economy as a primary goal for themselves. Rather, each person is interested in enlarging the size of his or her own slice. But if resources are used more efficiently, the overall size of the pie will be larger, and therefore, at least potentially, everyone could have a larger slice. For an outcome to be consistent with ideal economic efficiency, two conditions are necessary:
Rule 1 – Undertaking an economic action is efficient if it produces more benefits than costs. To satisfy economic efficiency, all actions generating more benefits than costs must be undertaken. Failure to undertake all such actions implies that a potential gain has been forgone.
Rule 2 – Undertaking an economic action is inefficient if it produces more costs than benefits. To satisfy economic efficiency, no action that generates more costs than benefits should be undertaken. When such counterproductive actions are taken, society is worse off because even better alternatives were forgone.
Economic efficiency results only when both of these conditions have been met. Either failure to undertake an efficient action (Rule I ) or the undertaking of an inefficient action (Rule 2) will result in economic inefficiency. We have avoided using a specific example here to ensure you understand the general idea of efficiency without linking it to a specific application. As we will show, the concept has wide-ranging applications- from the evaluation of government policy to how long you choose to brush your teeth in the morning.
The marginal cost curve shows the cost- including any opportunity costs- of spending additional time, effort, and resources on the activity. At Q,, the height of the marginal benefit curve exceeds the height of the marginal cost curve. Thus, at that point, the additional benefits of expanding the activity past Q, exceed the additional costs. According to Rule 1 of economic efficiency, we should continue to expand the activity until we reach Q2.Beyond Q2(at Q3,for example), the height of the marginal benefit curve is less than the height of the marginal cost curve. The additional benefits from expanding activity to that point are smaller than the additional costs. According to Rule 2, at Q,, we have gone too far and should cut back on the activity. Q2is the only point consistent with both rules of economic efficiency.

Ability to honor

admin — Wed, 11 Nov 2009 07:11:20 +0000

The guarantee effectively shifts the credit risk from the borrower to the guarantor. Where the guarantor is an institution such as an insurance company the value of its guarantees and ability to make them is highly dependent on its credit rating. A bank should never accept a guarantee where the credit rating of the guarantor is lower than that of the borrower.
These cross-border guarantees can also create internal credit problems for the lender where the guarantee is perfectly acceptable and well within the total credit lines authorized for use by the guarantor but the loan breaches head office limits on country exposure. It can be frustrating for bank officers in the international branches of a global bank to have a loan or credit line application from a subsidiary of an American triple-A corporate, and guaranteed by that company, turned down on credit grounds.

Equilibrium

admin — Mon, 09 Nov 2009 07:22:26 +0000

The demand for a product and the supply of that product meet at a point of equilibrium. The current price of any commodity, or any market, represents the point of equilibrium for that product at that moment in time.Because supply and demand each have varying elasticities and are best represented by curves, the point of equilibrium can shift in any direction in a market with changing factors.
Equilibrium will be an important concept in developing trading strategies. Though the supply and demand balance may not be calculated, in practical terms equilibrium is a balance between buyers and sellers, a price level at which everyone is willing to trade. although always happy Equilibrium is associated with lower volatility and often lower volume, because the urgency to buy or sell has been removed.

LEAST-SQUARES MODEL

admin — Sat, 07 Nov 2009 07:20:15 +0000

The least-squares regression model is the same technique that was used in the previous series of posts to find the relationship between two dependent markets, corn and soybeans, or to find how prices moved when driven by known related factors such as supply and demand. Here, the least-squares model will be used to find the relationship between time and price. rather than between two prices, where the price forecast that we are seeking is dependent upon time. The regression model will also be applied in an autoregressive way by recalculating the expected price daily and using the slope of the resulting straight line or curvilinear fit to determine the direction of the trend.
A simple error analysis can be used to evaluate the predictive qualities of this method. Assume that there is a lengthy price series for a market and that we would like to know how many prior days are optimum for predicting the next day’s price. The answer is found by looking at the average error in the predictions. If the number of days in the calculation increases and if the predictive error decreases, the answer is improving; if the error stops decreasing, the accuracy limit has been reached.

Marginal utility

admin — Fri, 06 Nov 2009 07:11:08 +0000

The law of diminishing marginal utility helps us understand the law of demand and the shape of the demand curve. The height of an individual’s demand curve at any specific unit is equal to the maximum price the consumer would be willing to pay for that unit- its marginal benefit to the consumer – given the number of units he or she has already purchased. Although marginal benefit is measured in dollars, the dollar amount reflects the opportunity cost of the unit in terms of other goods forgone. If a consumer is willing to pay, at most, $5 for an additional unit of the product, this indicates a willingness to give up, at most, $5 worth of other goods. Because a consumer’s willingness to pay for a unit of a good is directly related to the utility derived from consuming the unit, the law of diminishing marginal utility implies that a consumer’s marginal benefit, and thus the height of the demand curve, falls with the rate of consumption.
Because of the law of diminishing marginal utility, each additional pizza consumed per week will generate less marginal utility for Jones than the previous pizza. For this reason, Jones’s maximum willingness to pay- her marginal benefit- will fall as the quantity consumed increases. In addition, the steepness of Jones’s consumers will spend more time and money to inform themselves when they are buying “big ticket” items such as automobiles or air-conditioning systems than when they are buying pencils or paper towels.
demand curve, or its responsiveness to a change in price its elasticity- is a reflection of how rapidly Jones’s marginal utility diminishes with additional consumption. An individual’s demand curve for a good whose marginal value declines more rapidly will be steeper. Given what we now know about a consumer’s maximum willingness to pay for additional units of a good, we are now in a position to discuss the choice of how many units the consumer will choose to purchase at various prices. At any given price, consumers will purchase all units of a good f o r which their maximum willingness to pay- their marginal benefit- is greater than the price. They will stop at the point where the next unit’s marginal benefit would be less than the price. Although there are some problems related to dividing up certain kinds of goods (for example, it is hard to purchase half a car), we can generally say that a consumer will purchase all units of a good up to the point where the marginal benefit from it equals the price of the good (MB = P).
If the price of frozen pizza were $2.50, Jones would purchase three frozen pizzas per week. Consumer surplus is defined as the difference between the maximum price the consumer is willing to pay and the price actually paid. Jones’s maximum willingness to pay for the first unit is $3.50, which, at a price of $2.50, generates $1.00 of consumer surplus for Jones. When a consumer has purchased all units to the point where MB = iF: total consumer surplus is maximized. It is shown by the total triangular area under the demand curve that lies above the price.
Within this framework, how would a consumer respond to a decline in the price of a good? The consumer will increase purchases to the point where marginal benefit diminishes to the level of the new lower price. If marginal utility declines rapidly with consumption, the consumer will expand his or her purchases only slightly. If marginal utility declines less rapidly, it will take a larger expansion in purchases to reach this point. If the price were to rise, the consumer would cut back on purchases, eliminating those for which marginal benefit were now less than the price. This link between marginal benefit and maximum willingness to pay is the basis for the law of diminishing marginal utility, which underlies a person’s demand curve for a product. The shape and steepness of the curve, for example, depends upon his or her marginal utility.