BACKWARD INDUCTION
Process of concluding backwards from the end of a certain problem or scenario to determine the array of optimal actions in game theory. Looking at a two-player game, the method begins at the last step or decision of the player and determines his next move by expecting the player’s next action at that junction. Results from this process often do not hold up in reality. Game theory inventors John von Neumann and Oskar Morgenstern first mentioned this process in 1944.
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Housing Bubble
A run-up in housing prices fueled by demand, speculation and the belief that recent history is an infallible forecast of the future. Housing bubble ...
Low Exercise Price Option - LEPO
A call option for investors that has a price of 1 cent with an agreement to buy 1000 shares. This cannot be executed until its expiry. It works lik ...
Callable Security
A security with an enclosed call provision that gives the person who issues to redeem or repurchase the security by a particular period. Since the ...
Shadowing
Shadowing is the creation of values for variables that are not dependent strictly to market value. This means that these variable have market value ...
Pass-Through Rate
Pass-through rate is the net
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