Question

Please take a look at the financial information contained now in a standard news website, like http:// finance.yahoo.com/. What is the information being transmitted here? Also, who can explain what these terms mean? [Any one person can explain one term (in around 300 words). Add to another person's explanation by all means, but tackle only one term per post]. I am providing links to explanations of these terms from the internet, so do not worry if all you are doing in your post is summarizing that information, as long as you use your own words (no cut-and-paste please). Remember, every business student should be familiar with these terms, so take the trouble to study them. Consumer Price Index Current Ratio Dow Jones Industrial Average LIBOR P/E ratio Market capitalization ROE Prime Rate S&P 500 NASDAQ

Answer 1

1. Consumer Price Index :  It’s best thought of as, literally, a basket of things that you can buy and services that you can pay to use. The price index assigns a weighting to each item of the basket based on its perceived importance to the typical person (so basic expenses like food and housing are usually weighted quite heavily). The cost of the basket is then tracked over time and the change is used to calculate how much prices are rising in an economy and that’s one major measure of the economy’s “inflation rate.”

2. Current Ratio : Current ratio is a ratio of current assets to current liabilities. It is calculated to assess the liquidity of a business and also to assess the businesses ability to repay its current obligation using its current resources.

3. Dow Jones Industrial Average : Dow Jones, is something different. Let's say I have five stocks trading on an exchange - Apple, Microsoft, Google, McDonalds and Walmart; to develop some sort of indicator for the performance of the technology sector, I should account for the stock prices for the biggest companies in the tech sector - Apple, Google and Microsoft. I won't take Mcdonalds and Walmart because they aren't technology companies (majority of revenues not from tech); I'll call the average share price of these three tech companies as the Shubham Kakkar Technology Average - which could be an index, much like the Dow Jones Industrial Average.

4. Libor :The LIBOR (London Interbank Offered Rate) in theory is the average of numbers from several of the largest banks. Each number is supposed to represent the rate at which the bank can borrow from other banks on a given day.

5.P/E Ratio : P/E Ratio are commonly referred to stand for the Price to Earnings Ratio of a company. In simple terms it helps an investor to calculate the price multiple that investors are willing to pay for a company’s earnings

6. Market Capitalisation : It is the aggregate valuation of the company based on its current share price and the total number of outstanding stocks. It is calculated by multiplying the current market price of the company's share with the total outstanding shares of the company.

7. ROE : (Return on Equity) It is a type of financial ratio which calculates how many Dollars($) of profit a company is generating with each Dollars($) of shareholder’s equity.

8. Prime Rate : It is the reference interest rate based on which a bank lends to its credit worthy borrowers.

9. S&P 500 : The S&P 500 is the Standard and Poor stock market index based on the size of the leading 500 US companies.

10. NASDAQ : in the simplest of words, the Nasdaq is an exchange - which is basically a market-place. A market place where buyers and sellers congregate to engage in transactions, and these transactions involve securities - for example, shares of a company.
For example, if I want to sell Apple stock, and you want to buy Apple stock, we need a market-place to carry out this transaction, and that's exactly what a stock exchange serves as. It serves as a medium, and as a counter-party to both of us (meaning it'll act as a buyer in my case, and a seller in your case).

Note : It was very big question to answer please ask question in small portion

Thankyou