This gives the account entries the appearance of a T, hence the informal term T-Account is sometimes used to refer to these ledgers. Single entry systems cannot use T-accounts because they do not track the changes in account balances. In a single entry system, each transaction is recorded as a debit or credit to one...Read More

Thus, with the security market line, if an asset is providing too large of a return, it means that it is underpriced. This abnormal extra return above the market's return at a given level of risk is what is called the alpha. In theory, the market has correctly priced the security if it can be...Read More

Cross-hedging hedges a commodity with a futures contract for a closely related commodity not covered by a futures contract, but which has a positive price correlation. For instance, there are no futures for palm oil, but there is for soybean oil. Both oils are used extensively in food processing, so they are closely correlated in...Read More