Definition Asset-Backed Securities (ABS) are financial instruments that represent a claim on the cash flows generated by a pool of underlying assets. These assets can be anything from auto loans and credit card debt to student loans and mortgages. By bundling these assets together, issuers can create securities that investors can buy, which allows for a more fluid market for these types of loans.
Components of ABS Underlying Assets: The core of ABS is the portfolio of assets that generates cash flows.
Definition An audit trail, in the context of financial reports, refers to the chronological record of all the transactions, processes and financial data that provide documentary evidence of the steps taken in a financial reporting process. It includes all the documentation, records and logs that allow an auditor to trace the financial data back to its origin, ensuring accuracy, transparency and compliance with regulatory standards. Audit trails are essential for both internal controls and external audits, providing a way to verify the validity of financial information.
Definition The BEL 20 Index is a stock market index that represents the performance of the top 20 largest and most liquid companies listed on the Euronext Brussels exchange. It serves as a crucial barometer of the Belgian equity market, providing insights into the economic landscape of Belgium.
Components of the BEL 20 Index The BEL 20 Index includes a diverse range of companies from various sectors, ensuring it captures the overall market sentiment.
Definition Bitcoin is a digital currency or cryptocurrency, that was created in 2009 by an anonymous person or group of people using the name Satoshi Nakamoto. Unlike traditional currencies issued by governments, Bitcoin operates on a decentralized network using blockchain technology. This means that transactions are recorded on a public ledger, making it transparent and secure.
How Bitcoin Works Bitcoin transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Definition The Bloomberg Barclays US Aggregate Bond Index is a comprehensive measure of the U.S. investment-grade bond market. This index includes a wide array of bonds, such as U.S. Treasury securities, government agency bonds, corporate bonds and mortgage-backed securities. It serves as a benchmark for both individual and institutional investors to evaluate the performance of their bond investments.
Components The index consists of several key components:
U.S. Treasury Securities: These are government-issued bonds considered to be among the safest investments.
Definition The Bovespa Index, known as IBOVESPA, is Brazil’s benchmark stock market index, representing the performance of the country’s most significant and liquid stocks. It is an essential tool for investors looking to gauge the overall health of the Brazilian economy and stock market. The index is calculated using a weighted average based on the market capitalization of its components, making it a reliable indicator of market trends.
Components of the Bovespa Index The IBOVESPA comprises a diverse range of stocks from various sectors.
Definition The BSE Sensex, short for the Bombay Stock Exchange Sensitive Index, is one of the most prominent stock market indices in India. It tracks the performance of 30 of the largest and most financially sound companies listed on the Bombay Stock Exchange (BSE). The Sensex serves as a barometer for the Indian stock market, reflecting market trends and investor sentiments.
Components of BSE Sensex The BSE Sensex comprises 30 well-established and financially robust companies across various sectors.
Definition The CAC 40 Index, short for “Cotation Assistée en Continu,” is a benchmark stock market index that represents the 40 largest publicly traded companies in France. It serves as a vital indicator of the French stock market’s health and is often used by investors and analysts to gauge economic performance and investor sentiment.
Components The CAC 40 Index includes a diverse range of companies from various sectors, including technology, finance, consumer goods and energy.
Definition Commodities are essential goods that can be bought and sold, typically categorized into two main groups: hard and soft commodities. Hard commodities are natural resources that are mined or extracted, like oil and gold. Soft commodities are agricultural products or livestock, including wheat, coffee and cattle.
The importance of commodities in the financial world cannot be overstated; they serve as a hedge against inflation and are often viewed as a safe haven during economic downturns.
Definition Commodity derivatives are financial instruments whose value is derived from the price of underlying commodities such as gold, oil and agricultural products. These derivatives are essential tools in the financial markets, primarily used for hedging risks associated with price fluctuations, allowing traders and investors to manage exposure in volatile markets efficiently.
Components of Commodity Derivatives Commodity derivatives consist of several key components:
Underlying Asset: The physical commodity itself, such as crude oil, natural gas, grains or metals.