Trading effect is one of the tools that help us measure the difference between the returns of the bond portfolio and any chosen benchmark. The difference comes up when portfolio goes through short-term alterations. Trading effect can also measure whether the current trade influence the portfolio in a good or in a bad way.

 

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Intrinsic value is a difference between the price of the underlying instrument and the strike price of the given asset.

 

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Overheated economy occurs in the countries that have been having extremely good economic performance which resulted in high levels of inflation and overproducing. High prices are also quite often the consequence of the overheated economy. It usually results in recession.

 

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Spot trade is an instant purchase of any of the financial instruments – currencies, commodities or shares. The majority of the spot contracts include a physical delivery of the instrument to the trader who purchased them. The difference in value of the spot and futures of the instrument is counted via the time value of the payment which is based on interest rates and time maturity.

 

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