The Modigliani-Miller model summarizes three theorems that the two American economists Franco Modigliani and Merton Miller have presented in an essay in 1958. Their paper deals with the influence of a company’s debt-equity ratio on its capital costs and market […]

The distinction between “clean price” and “dirty price” is about the so-called accrued interest. Accrued interest can, as the name suggests, accrue – and it is therefore important to distinguish between the two price types. Explanation: For example, bonds can […]

In principle, shares can be issued as bearer or registered shares. In the case of bearer shares – as the name indicates – the respective holder is the beneficiary of the security; in the case of registered shares, on the […]

The continuous compounding model is a thought model or thought experiment that illustrates the difference between an annual, quarterly, monthly and theoretically possible daily interest. Basically, the aim is to internalise the interest or compound interest effect. Continuous compounding would […]

All of the world’s major central banks have been practicing “politics of cheap money” in recent years and have therefore set their base rates close to zero. This “glut of money” has pushed share prices higher and has hurt savers […]

Summary for those in a hurry: In comparison to a share, a bond does not represent an interest in a company. With a bond, you simply lend money to a company and are offered a certain, usually fixed, interest rate. […]

Summary for those in a hurry: Although large US companies (e.g. Coca Cola, Boeing or IMB) can also be traded via German trading systems (e.g. XETRA), we advise small investors, due to the low liquidity in Germany, to trade US […]

The MSCI World Index is one of the most well-known stock indices worldwide. It is well suited when it comes to investing in equities as an asset class without placing too much emphasis on individual regions or markets. MSCI stands […]