Throughout the history of free markets, traders have made money through arbitrage, a tactic that takes advantage of price differences to make risk-free profits. Salman Khan of the Khan Academy describes how arbitrage works in a simple example.
One of the culprits blamed for the financial chaos of 2008-2009, were collateralized debt obligations. Like any derivative, the value of a CDO is based on an underlying asset. Khan of the Khan Academy explains.
Credit default swaps, also known as CDS, act as insurance against default, but these financial instruments are actually used in a number of complex ways. How are credit default swaps employed, and what is the rationale for these securities?
Fair value is a tool used by investors to understand the relationship between the value of futures contracts and the current price of a stock. The term is used in pre-market hours to help forecast the direction of the market.
Buying a home is usually the biggest individual investment people make in their lifetime and more often than not, a mortgage is involved. With such large sums of money involved in the mortgage market, financial firms profit by using a type financial instrument called mortgage-backed securities, or MBS.
The general rule in economics is that the value of money today will not be equal to the same amount of money in the future. Also known as the time value of money.
The Russia crisis this week has thrust the talk of "capital controls" back into the global financial conversation.
The beige book is an important indicator on the state of the U.S. economy and a critical tool for the Federal Reserve. CNBC explains.
The debt ceiling is a cap set by Congress on how much the federal government can borrow to pay its debts.
Economic data can be like the porridge of a certain fairy tale: Too hot, too cold, or just right.
Sequestration is a fiscal policy procedure adopted by Congress to deal with the federal budget deficit.
Americans often check their receipts to make sure they've bought everything they need, and probably to see if what they paid this time is any different from the last trip. The government does the same with the Consumer Price Index. Here are the details.
Argentina is almost certainly headed for a technical default of its bond-payment obligations at 12:01 Thursday morning.
As Pope Francis assumes leadership of the world's 1.2 billion Catholics, he's got his work cut out for him on many fronts.
There are all kinds of debt—as small as personal debt or as large as national debt. There's another type of debt as important as the rest—called Sovereign Debt. CNBC Explains.
President Obama wants to use the tax code to slow the widening gap between the richest and poorest.
The Swiss National Bank's move to break the franc away from its set value against the euro stunned financial markets.
No matter where you are in terms of investment knowledge, investors all agree on one thing: don't panic.