Archives: Terms

Definition of Organization for Economic Cooperation and Development (OECD) The Organization for Economic Cooperation and Development (OECD) is an international organization that works to build better policies for better lives. Its goal is to shape policies that foster prosperity, equality, opportunity, and well-being for all. Comprising 38 member countries, the […]

Definition of Ordinary Share An ordinary share, also known as a common share, represents equity ownership in a company. It confers on its holder the right to vote at shareholders’ meetings and to receive a portion of the company’s profits in the form of dividends. However, the amount received through […]

Definition of Ordinary Least Squares (OLS) Ordinary Least Squares (OLS) is a method used in statistics to estimate the parameters of a linear regression model. OLS aims to find the line (or hyperplane, in multiple dimensions) that minimizes the sum of the squared differences between the observed values and the […]

Definition of Ordinal Utility Ordinal utility is a concept within microeconomics that deals with the ranking of preferences or choices by individuals without assigning absolute, quantifiable values to those preferences. It contrasts with cardinal utility, which attempts to assign specific numerical values to utility. The ordinal utility approach suggests that […]

Definition of Order-Driven Market An order-driven market is a type of financial market structure where the trades are facilitated based on the orders placed by participants. Unlike a quote-driven market, where prices are determined by market makers or dealers, an order-driven market relies on an electronic list of buy and […]

Definition of Order of Integration The order of integration is a concept in time series analysis that refers to the minimum number of times a non-stationary time series needs to be differenced to become stationary. A time series is said to be stationary if its statistical properties such as mean, […]

### Definition of Order Book An order book is a real-time, continually updated list of buy and sell orders for a specific financial instrument, such as stocks, bonds, or currencies, on an exchange. It represents the supply and demand for a particular asset at various price levels and is fundamental […]

### Definition of Option Value Option value in economics and finance refers to the worth of keeping one’s options open. In a broader sense, it encompasses the value associated with having the flexibility to choose from various alternatives in the future, rather than committing to a specific course of action […]

Definition of an Option An option in economics refers to a contract that gives the holder the right, but not the obligation, to buy (in the case of a call option) or sell (in the case of a put option) an underlying asset or financial instrument at a specified strike […]

Definition of Optimum Tariff An optimum tariff is a concept in international trade theory that refers to the rate of tariff (which is a tax on imports) that maximizes a country’s welfare. Essentially, it’s the ideal tax rate that a large country (one that can influence international prices) can impose […]