Inversion and Investment: Difference between pages

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imported>Doug Williamson
(Expand explanation of base currency, for clarity.)
 
imported>Doug Williamson
(Layout.)
 
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1.
1. ''Economics''.
Expenditure by firms on (or creation by firms of) capital goods and stock to be used for future production or sale.


A term used in foreign exchange rate quotation.


2.


'''Example'''
More broadly, the expenditure of money or money's worth with a view to increasing over time the value invested.
 
Consider the historical FX quote:
 
1 GBP = USD 1.4598 - 1.4602.
 
The base currency is GBP.
 
This is the currency there is a single unit of, to be exchanged for a variable number of USD.
 
 
The inversion of this FX quote means expressing the same price, but with the other currency as the base currency (USD here):
 
1 USD = GBP ( 1 / 1.4602 ) - ( 1 / 1.4598 )
 
1 USD = GBP 0.6848 - 0.6850.
 
 
In the inverted FX quote, USD is the currency there is a single unit of (to be exchanged for a variable number of GBP).
 
 
2.
 
In any market, the reversal of a normal - or commonly expected - relationship.
 
For example the situation of an Inverse yield curve, where longer maturities of funds are trading at LOWER yields than shorter-dated maturities (being the opposite of the normally expected upward-sloping relationship).




== See also ==
== See also ==
* [[Base currency]]
* [[Aggregate demand]]
* [[Foreign exchange]]
* [[Asset risk]]
* [[Inverse quote]]
* [[Associate]]
* [[Inverse yield curve]]
* [[Cash investing in a new world]]
* [[Divestment]]
* [[Injection]]
* [[Investment Committees]]
* [[Investment company]]
* [[Investment risk]]
* [[Investor]]
* [[Non-investment product]]
* [[Payback period]]
* [[Robo-adviser]]
* [[Short-term investments]]


[[Category:Manage_risks]]
[[Category:Investment]]

Revision as of 09:47, 30 January 2020

1. Economics.

Expenditure by firms on (or creation by firms of) capital goods and stock to be used for future production or sale.


2.

More broadly, the expenditure of money or money's worth with a view to increasing over time the value invested.


See also

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