Warren Edward Buffett, born on August 30, 1930, in Omaha, USA, is an American businessman and investor who managed to amass a personal fortune of more than $60 billion. This man is considered by many as the most successful investor the stock market has ever known and he is taken as a true role model … Continue reading Warren Buffett’s investment strategy.
The term “Efficient Market” was used for the first time by the American economist Eugene Fama(1939-) in his famous article published in 1970 “Efficient Capital Market: a review of theory and empirical works”.The main idea behind this theory is that it is impossible for investors to outperform the market by looking for undervalued stocks or … Continue reading The efficient market hypothesis
The international monetary system (IMS): a set of practices, rules and institutions aimed at organizing and monitoring monetary exchanges and financial flows between countries. This system of is generally defined as international payments and exchange rates between national currencies allows transactions between countries. Through history the world has known different monetary systems, one of the … Continue reading Bretton Woods international monetary system.
Commercial banks liquidity, a measure of the cash and other assets banks have available to pay bills and meet short-term business and financial obligations, is not stable. It varies according to different factors: bank liquidity factors. In fact, the factors of bank liquidity are the set of events that affect banks’ liquidity and constrain them … Continue reading Factors affecting bank liquidity.
Monetary creation consists of increasing the quantity of money held by non-financial agents (NFA). Indeed, within the economy the quantity of money in circulation is not stable. Its variation has significant meaning. When we observe in a given period a positive variation of the monetary aggregate we speak of money creation. It is the putting … Continue reading Mechanisms of monetary creation.
Money as it appears today comes in various forms and fulfills different functions in order to facilitate our daily economic transactions. Money can be defined by the functions it performs. It fulfills three essential functions, it is at the same time a unit of account, a medium of exchange and a store of value. … Continue reading Functions of money.
Financial reporting: practices that help summarize the financial information of the company and provide a honest and transparent view of its financial situation and performance to the stakeholders.Stakeholders include owners, managers, employees, investors, institutions and government who need the valuable information offered by financial reports about investments, credit extensions, cash flow in… to be able … Continue reading Financial reporting.
Stock market, even though this term has always been confusing for many of us, it actually isn’t that complicated. Let’s dive into this article to clarify some basic concepts about stock markets. Let’s first define what a Stock is ?A stock or a Share is a title representing a fraction of a company’s capital and … Continue reading Understand stock market
Commercial banks, one of the major components of any economy in the world, in this article we will discuss some of their functions and how important is their role in the economic cycle . Commercial banks are financial institutions that accept deposits, grant loans and offer basic financial products.Commercial banks earnings are mainly interests from … Continue reading Commercial banks
Central banks are public institutions that deal only with commercial banks (lend them money and hold their extra money) they have no borrowing-lending relationships with governments and people. Central banks are usually institutionally independent from political interference.2 categories of central banks are distinguished in the world:– Single mandate banks: they only target inflation (like the European central … Continue reading Central banks and monetary policy